The Earnings Assimilation of Unauthorized Immigrants

We examine the earnings assimilation of unauthorized Hispanic immigrants using an innovative strategy to estimate which individuals may lack legal work authorization. Our strategy relies on restricted-use data linking respondents of the Current Population Survey to Social Security records. A successful match with Social Security records, along with survey information, is used as evidence that an immigrant is authorized. Using a successful match with Social Security records allows us to rule out as being unauthorized half of all individuals otherwise classified as unauthorized. Our results indicate that unauthorized immigrant men have significantly lower earnings than authorized immigrant men over the first 15 years since arrival. However, despite facing additional obstacles, immigrants without work authorization make the same amount of progress in catching up with the earnings of native Whites. Unauthorized immigrant women have similar earnings as women with work authorization for much of their careers. Overall, we find a pattern of persistent inequality whereby both authorized and unauthorized Hispanic immigrants make modest progress catching up with natives' earnings. We test alternative explanations for the observed pattern in earnings trajectories and find that the occupation and industry in which immigrants are employed, along with the number of hours worked, appear to explain a large part of the disparity relative to native Whites.