Earnings Inequality within Detailed Occupations and Foreign-Born Labor

Jennifer Cheeseman Day, U.S. Census Bureau
Ana J. Montalvo, U.S. Census Bureau

In recent years, the composition of the American workforce has shifted to a higher proportion of foreign-born workers. Some researchers suggest that the foreign born are an important component of the economy as they work in jobs that are difficult to fill. Others argue that the abundance of foreign-born workers depresses natives’ wages. Inequality of labor market earnings also has increased. With technological advances, the US economy experienced polarizing wage growth across occupations. Those requiring highly skilled and more educated workers, such as managerial and professional occupations, have benefited with rapid growth, as have service-oriented occupations needing the least education, but are difficult to automate. This research attempts to examine the how the influx of foreign-born workers has contributed to rising wage inequality. Has earnings inequality increased more for occupations with an increased share of foreign born? Do influxes of foreign-born workers depress earnings in a given occupation?