Differences in productivity or discrimination? Latin American and Caribbean immigrants in the US labor market (Working Paper #159)

Maritza Caicedo Riazcos, Ph.D. Candidate in Demography, El Colegio de México

Abstract: This paper examines the salary gap between the native-born population in the United States and immigrants from Latin America and the Caribbean. Using the decomposition analysis developed by Oaxaca (1973), the article uses information from the 2003 Current Population Survey (CPS) to establish the degree to which the salary gap between these two groups is due to differences in productivity vs. differences in treatment of certain groups. The analysis places Latin American and Caribbean immigrants into seven groups: Mexicans, Cubans, Dominicans, Jamaicans and Haitians, Central Americans (Salvadorans, Guatemalans, Hondurans and Nicaraguans), South Americans (Colombians, Ecuadorians and Peruvians), and an “other” category that includes all other immigrants from the region. The native-born population is divided into White non- Hispanics and African-Americans. These groupings are intended to reflect the increase in immigration to the United States from these countries between 1980 and 2000.

The first section discusses the principal theories that have been employed to explain differences in salary between males and females. The second section offers a brief overview of salary distribution in the United States as well as information about workers’ salaries based on place of origin, sex, and level of education. The third section examines the salary gap between native-born workers and immigrants, as well as between males and females within each group. The fourth section discusses the need to correct for selection bias in the data when analyzing salaries. The final section discusses implications of the research findings for U.S. immigration policy.

Working Paper #159 »