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The Earnings of Skilled and Unskilled Immigrants at the End of the Nineteenth Century

Published online by Cambridge University Press:  03 March 2009

Barry Eichengreen  and
Henry A. Gemery
Barry Eichengreen
Affiliation:
Harvard University, Cambridge, Massachusetts 02138
Henry A. Gemery
Affiliation:
Colby College, Waterville, Maine 04901
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Abstract

Most historical studies of immigration in nineteenth-century America have failed to distinguish among the labor-market experiences of different immigrant groups. Using a sample of some 4000 wage earners from turn-of-the-century Iowa, we examine the relative earnings of skilled and unskilled immigrants and suggest the factors which contributed to their very different post-immigration experiences. The results indicate that prior knowledge of a trade conferred upon immigrants an initial earnings advantage, but that unskilled immigrants managed subsequently to close some but not all of the gap by reaping greater returns to experience on the job.

Type
Papers Presented at the Forty-Fifth Annual Meeting of the Economic History Association
Information
The Journal of Economic History , Volume 46 , Issue 2 , June 1986 , pp. 441 - 454
Copyright
Copyright © The Economic History Association 1986

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References

Barry Eichengreen is Associate Professor of Economics, Harvard University, Cambridge, Massachusetts 02138; Henry A. Gemery is Professor of Economics, Colby College, Waterville, Maine 04901. They are grateful to Bruce Chapman, Joan Underhill Hannon, Robert Margo, and Glen Withers for helpful comments.

1 Higgs, Robert, “Race, Skill and Earnings: American Immigrants in 1909,” this JOURNAL, 31 (06 1971), pp. 420–28;Google ScholarHill, Peter J., “Relative Skill and Income Levels of Native and Foreign Born Workers in the United States,” Explorations in Economic History, 12 (01 1975), pp. 47–60;CrossRefGoogle ScholarShergold, Peter, “Relative Skill and Income Levels of Native and Foreign Born Workers: A Re-examination,” Explorations in Economic History, 13 (10 1976), pp. 451–61;CrossRefGoogle ScholarMcGouldrick, Paul and Tannen, M., “Did American Manufacturers Discriminate Against Immigrants Before 1914?” this JOURNAL, 37 (09 1977), pp. 723–46;Google ScholarHannon, Joan Underhill, The Immigrant in the Promised Land: Human Capital and Ethnic Discrimination in the Michigan Labor Market, 1888–1890 (Ph.D. diss., University of Wisconsin, 1977),Google Scholar chap. 5; Fraundorf, Martha Norby, “Relative Earnings of Native and Foreign Born Women,” Explorations in Economic History, 15 (04 1978), pp. 211–20;CrossRefGoogle ScholarBlau, Francine, “Immigration and Labor Earnings in Early Twentieth Century America,” Research in Population Economics, 2 (1980), pp. 21–41;Google ScholarHannon, Joan Underhill, “Ethnic Discrimination in a Nineteenth Century Mining District: Michigan Copper Mines, 1888,” Explorations in Economic History, 19 (01 1982), pp. 28–51;CrossRefGoogle Scholar and “City Size and Ethnic Discrimination: Michigan Agricultural Implements and Iron Working Industries, 1890,” this JOURNAL, 42 (12 1982), pp. 825–46.Google Scholar

2 See for example Hourwich, Isaac A., Immigration and Labor (New York, 1918), pp. 284–310. We use the phrase “skilled and unskilled immigrants” to denote those who, upon arrival in the United States, possessed or failed to possess the training which could then be put to use in their U.S. occupation.Google Scholar

3 See Annual Report of the Commissioner-General of Immigration (Washington, D.C., 1899),Google Scholar table 7, and the Report for 1900, table 7, for 1904, table 9, and for 1910, table 10. For discussion of these statistics, see Douglas, Paul A., “Is the New Immigration More Unskilled than the Old?” Quarterly Publications of the American Statistical Association, 126 (1919), pp. 395–403.Google Scholar

4 See for example Hunter, Robert, Poverty (New York, 1904),Google Scholar chap. 6; Claghorn, Kate Holladay, “Immigration in its Relation to Pauperism,” Annals of the American Academy of Political and Social Science, 24 (1904), pp. 185–205.CrossRefGoogle Scholar

5 State of Iowa, Sixth Biennial Report of the Bureau of Labor Statistics for the State of Iowa (Des Moines, 1895).Google Scholar

6 For details on the survey design, see State of Iowa, Sixth Report, p. 8.Google Scholar

7 Although the small number of female immigrants in the sample makes it difficult to interpret the results for women, we have estimated comparable regressions for women, which are available upon request.

8 For the antebellum evidence, see Villaflor, Georgia C. and Sokoloff, Kenneth L., “Migration in Colonial America: Evidence from Militia Muster Rolls,” Social Science History (Fall 1982), p. 556.Google Scholar For the theoretical argument, see Margo, Robert A. and Villaflor, Georgia C., “The Antebellum ‘Surge’ in Skill Differentials One More Time: New Evidence,” National Bureau of Economic Research Working Paper, No. 1758 (11 1985).Google Scholar

9 See Freeman, Richard and Medoff, James, What Do Unions Do? (New York, 1984);Google Scholar and Eichengreen, Barry, “The Impact of Unions on Labor Earnings and Hours at the End of the Nineteenth Century,” Harvard Institute of Economic Research Discussion Paper, No. 1166 (1985).Google Scholar

10 We experimented with various ways of distinguishing categories of immigrants, differentiating between native English speakers (the English, Welsh, Scottish, Irish, and in some instances Canadians) and other immigrants and, alternatively, differentiating between old immigrants from Britain, France, Germany, the Low Countries and Scandinavia and new immigrants from other countries of origin, but were unable to detect any difference for the different categories of immigrants that was statistically significant at standard confidence levels.

11 Blau, , “Immigration and Labor Earnings.”Google Scholar

12 Heckman, James, “Sample Selection Bias as a Specification Error,” Econometrica, 47 (01 1979), pp. 53–61.CrossRefGoogle Scholar

13 See, for example, Chiswick, Barry, “The Effect of Americanization on the Earnings of Foreign-Born Men,” Journal of Political Economy, 86 (10 1978), pp. 897–981.CrossRefGoogle Scholar For a less optimistic assessment of the assimilation of immigrants in the U.S. labor market of the 1970s, see Connelly, Rachel Ex, “Two Essays on Demographics and Earnings,” (Ph.D. diss., University of Michigan, 1985), chap. 1.Google Scholar

14 Hannon, “City Size.” Although Williams asserted that “[m]easured either by intellectual, social, economic or material standards, the average immigrant of any particular class from these countries is far below the best of his countrymen who remain behind, and probably also below the average…” we do not embrace this conclusion. Williams, William, The New Immigration (New York, 1903), p. 286.Google Scholar For a dissenting view, see Hourwich, , Immigration, p. 70.Google Scholar Modern investigators have also begun to question the generality of the overtaking effect. See Borjas, George J., “The Impact of Assimilation on the Earnings of Immigrants: A Reexamination of Evidence,” National Bureau of Economic Research Working Paper, No. 1515 (12 1984).Google Scholar

15 This procedure is based on the methodology set out by Blinder, Alan, “Wage Discrimination: Reduced Form and Structural Estimates,” Journal of Human Resources, 8 (Fall 1973), pp. 436–55.CrossRefGoogle Scholar

16 Note that this is contrary to the appearance of Figure 1 since the intercepts of earnings profiles there have been adjusted for occupation but not for differences in unionization or marriage rates.