Working Paper: NBER ID: w29418
Authors: Gordon H. Hanson; Chen Liu
Abstract: Job choice by high-skilled foreign-born workers in the US correlates strongly with country of origin. We apply a Fréchet-Roy model of occupational choice to evaluate the causes of immigrant sorting. In a gravity specification, we find that revealed comparative advantage in the US is stronger for workers from countries with higher education quality in occupations that are more intensive in cognitive reasoning, and for workers from countries that are more linguistically similar to the US in occupations that are more intensive in communication. Our findings hold for immigrants who arrived in the US at age 18 or older (who received their K-12 education abroad) but not for immigrants who arrived in the US as children (who received their K-12 education domestically). We obtain similar results for immigrant sorting in Canada, which supports our interpretation that origin-country education quality, rather than US immigration policy, is what drives sorting patterns. In counterfactual analysis, we evaluate the consequences of reallocating visas for college-educated immigrants according to origin-country education quality.
Keywords: Immigration; Occupational Sorting; Comparative Advantage; Education Quality
JEL Codes: F22; I25; J61; O15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| education quality (I21) | occupational sorting (J29) |
| linguistic similarity (Y80) | occupational sorting (J29) |
| higher education quality (I23) | higher share in cognitive-intensive jobs (J24) |
| higher PISA test scores (I24) | higher share in cognitive-intensive jobs (J24) |
| age at immigration (J11) | occupational sorting (J29) |
| origin-country characteristics (O57) | occupational sorting (J29) |
| U.S. immigration policy (K37) | sorting patterns (C69) |
| Canada's visa allocation system (J68) | sorting patterns (C69) |