ABSTRACT
The assimilation hypothesis proposes that many immigrants will arrive in the US with differences in their human capital characteristics which put them at an early disadvantage in the labor market compared to native-born workers. The self-selection hypothesis says that not only will the earnings of immigrants converge toward the native-born norm over time in the US but that in many cases immigrant earnings will surpass those of similar native-born workers. Assimilation adjustments also imply some important differences between foreign-born and native-born workers in terms of labor force processes and outcomes. The area unemployment rate consistently performs as expected, increasing probabilities of job loss, reducing the probability of job quits, with a net effect of increasing unemployment, while reducing employment and labor force participation. The implications are different as well: immigrant high school dropouts are likely to experience the disadvantages of low human capital to an even greater extent than ordinary economic migrants.
