Journal Issue: Opportunity in America Volume 16 Number 2 Fall 2006
The ultimate impact of immigration on the United States depends not only on the economic, social, political, and cultural experiences of the immigrants themselves, but also on how their households fare in those areas over several generations. The resurgence of large-scale immigration to the United States in recent decades has raised the foreign-born share of the population from 4.7 percent in 1970 to 12.7 percent in 2003 and is expected to drive up the population share of the second generation (those born in the United States with at least one foreign-born parent) from 10.5 percent in 2004 to nearly 14 percent by 2050. The grandchildren of current immigrants will make up an additional 9 percent of the population by mid-century.1
The traditional view of the social mobility of immigrant households across generations is vividly encapsulated by the melting pot metaphor. In that view, immigrants from an array of diverse countries blend into a homogeneous native population relatively quickly, perhaps in two generations. Although many analysts have questioned the relevance of the melting pot image to the experience of many ethnic groups in the United States, it seems to have a magnetic and intuitive appeal that often confounds its detractors.2 As a result, the “assimilationist” perspective has long dominated the thinking of many observers of the immigrant experience.
Ironically, and from a purely economic perspective, it is not clear that the United States would be better off if a melting pot quickly blended the new immigrants, making them indistinguishable from native-born workers. After all, the productivity gains from immigration are maximized when the immigrant population differs most from the native population and immigrants have skills that the native workforce lacks—or, in the commonly used phraseology, when “immigrants do jobs that natives do not want to do.” As a result, the productivity gains from immigration would be larger if the United States were to pursue policies that hampered and delayed the assimilation of immigrants. If the melting pot bubbled away efficiently, the only way for the country to replenish the productivity gains from immigration would be to admit more and more immigrants.
Of course, this perspective is much too narrow and misses the point. Most available estimates suggest that the net productivity gains from immigration are quite small even in the first generation, when the immigrants differ most from native workers.3 Moreover, the economic, social, and political consequences of delaying assimilation could be disastrous. The ethnic conflicts in many regions of the modern world, for instance, often originated centuries ago, and their consequences still fester. One does not have to be a very astute observer of the human condition to discern the value of a cohesive social fabric. Therefore, it is probably in the national interest of the United States to pursue policies that both spur substantial intergenerational progress by immigrant households and reduce the importance of ethnicity in determining how well future generations fare.
In what follows I summarize research on social mobility in the immigrant population and draw out some of the lessons implied. The evidence suggests that there is significant economic “catching up” from the first to the second generations, with the relative wage of the second generation being, on average, about 5 to 10 percent higher than that of the first. At the same time, the socioeconomic status of the immigrant generation and that of their children are strongly correlated, as is also, though more weakly, that of their grandchildren. In rough terms, about half of the differences in relative economic status across ethnic groups in one generation persist into the next. As a result, the very large ethnic differences in economic status among today's immigrants will likely dominate American society— and discussions of American social policy—for much of the twenty-first century.