Low-Skilled Immigrant Entrepreneurship

More than half of the foreign born workforce in the U.S. have no schooling beyond high school and about 20 percent of the low-skilled workforce are immigrants. More than 10 percent of these low-skilled immigrants are self-employed. Utilizing longitudinal data from the 1996, 2001 and 2004 Survey of Income and Program Participation panels, this paper analyzes the returns to self-employment among low-skilled immigrants. We compare annual earnings and earnings growth of immigrant entrepreneurs to immigrants in wage/salary employment as well as native born business owners. We find that the returns to low-skilled self-employment among immigrants is higher than it is among natives but also that wage/salary employment is a more financially rewarding option for most low-skilled immigrants. An exception is immigrant men, who are found to have higher earnings growth than immigrants in wage/salary employment and are predicted to reach earnings parity after approximately 10 years in business. We also find that most of the 20 percent male native-immigrant earnings gap among low-skilled business owners can be explained primarily by differences in the ethnic composition. Low-skilled female foreign born entrepreneurs are found to have earnings roughly equal to those of self-employed native born women.immigrants, low-skill, earnings, self-employment, entrepreneurship

Is the GED an Effective Route to Postsecondary Education for School Dropouts?

We use data from the Texas Schools Microdata Panel (TSMP) to examine the extent to which dropouts use the GED as a route to post-secondary education. The paper develops a model pointing out the potential biases in estimating the effects of taking the “GED path” to postsecondary education. Lacking suitable instruments that would allow us to directly address potential biases, our approach is to base our estimates on a set of academically “at risk” students who are very similar in the 8th grade. We observe that the eventual high school graduates in this group have much better postsecondary education outcomes than do the similar at-risk 8th graders who dropped out and obtained a GED. Our model explains the observed differences, and allows for a discussion of the policy challenges inherent in improving the postsecondary outcomes of dropouts.GED, dropouts, post-secondary education

H-1Bs: How Do They Stack Up to US Born Workers?

Combining unique individual level H-1B data from U.S. Citizenship and Immigration Services (USCIS) and data from the 2009 American Community Survey, we analyze earnings differences between H-1B visa holders and US born workers in STEM occupations. The data indicate that H-1Bs are younger and more skilled, as measured by education, than US born workers in the same occupations. We fail to find support for the notion that H-1Bs are paid less that observationally similar US born workers; in fact, they appear to have higher earnings in some key STEM occupations, including information technology.temporary workers, H-1B, immigration, high-skill, STEM

Why are Hispanic and African-American dropout rates so high?

The proportion of students who do not graduate from high school is dramatically higher among the two largest minority groups, Hispanics and African-Americans, compared to non-Hispanic whites. In this paper we utilize unique student-level data from the Texas Schools Microdata Panel (TSMP) in an attempt to determine what factors contribute to the higher minority dropout rates. We show that poverty is a key contributor. Lack of English proficiency among Hispanic student is linked to the higher Hispanic dropout probability. Our results also suggest that neighborhood characteristics may be important in explaining the high African-American dropout rates. We also address the issue of the surprisingly low official dropout rates reported by the Texas Education Agency (TEA) and show that the GED program explains some of the discrepancy

Labor Market Assimilation and the Self- Employment Decision of Immigrant Entrepreneurs

This paper uses data from the 1980 and 1990 U.S. Censuses to study labor market assimilation of self-employed immigrants. Separate earnings functions for the self-employed and wage/salary workers are estimated. To control for endogenous sorting into the sectors, models of the self-employment decision are estimated. Variables for the proportion of immigrants in the population and average earnings ratios are used as instruments to control for self-selection into self-employment and consequently identify the inverse Mills correction term in the earnings models. Self-employed immigrants do substantially better in the labor market than wage/salary immigrants. Earnings of self-employed immigrants are predicted to converge with natives? wage/salary earnings at about age 30 and natives? self-employed earnings at about age 40. Including the self-employed in the sample reduces the immigrantnative earnings gap by, on average, roughly 14 percent

Did the 2007 Legal Arizona Workers Act Reduce the State's Unauthorized Immigrant Population?

We test for an effect of Arizona’s 2007 Legal Arizona Workers Act (LAWA) on the proportion of the state population characterized as foreign-born, as non-citizen, and as non-citizen Hispanic. We use the synthetic control method to select a group of states against which the population trends of Arizona can be compared. We document a notable and statistically significant reduction in the proportion of the Arizona population that is foreign-born and in particular, that is Hispanic noncitizen. The decline observed for Arizona matches the timing of LAWA's implementation, deviates from the time series for the chosen synthetic control group, and stands out relative to the distribution of placebo estimates for the remainder of states in the nation. Furthermore, we do not observe similar declines for Hispanic naturalized citizens, a group not targeted by the legislation. Our results on LAWA's impact on the housing market provide further support for our findings.illegal, unauthorized, undocumented, immigration, Hispanic, Arizona

Incarceration and Crime: Evidence from California's Public Safety Realignment Reform

We evaluate the effect of perhaps the largest exogenous decline in a state's incarceration rate in U.S. history on local crime rates. We assess the effects of a recent reform in California that caused a sharp and permanent reduction in the state's incarceration rate. We exploit the large variation across California counties in the effect of this reform on county-specific prison incarceration rates. We find very little evidence of an effect of the large reduction in incarceration rates on violent crime and evidence of modest effects on property crime, auto theft in particular. These effects are considerably smaller than existing estimates in the literature based on panel data for periods of time when the U.S. incarceration rate was considerably lower. We corroborate theses cross-county results with a synthetic-cohort analysis of state crime rates in California. This state-wide analysis confirms our findings from the county-level analysis. In conjunction with existing published research, the results from this study support the hypothesis of a crime-prison effect that diminishes with the scale of incarceration

Measuring the Returns to the GED : Using an Exogenous Change in GED Passing Standards as a Natural Experiment

In this paper, we exploit an exogenous change in the passing standard required to obtain a General Educational Development (GED) credential to identify the impact of the GED on the quarterly earnings of male dropouts, utilizing the Texas Schools Micro Data Panel (TSMP). These unique data contain demographic and GED test score information from the Texas Education Agency linked to pre- and post-test taking Unemployment Insurance quarterly wage records from the Texas Workforce Commission. Comparing Texas dropouts who acquired a GED before the passing standard was raised in 1997 to dropouts with the same test scores who failed the GED exams after the passing standard hike, we find no evidence of a positive ?GED effect? on earnings. The finding of no significant difference in pre-test taking earnings between the treatment and control group support the validity of the natural experiment. Our results are robust to a number of specifications and sub-samples of our general sample population of 16-40 year old males

Immigrant Legalization: Assessing the Labor Market Effects

Assesses the effects of a legalization program for unauthorized immigrants on the labor market, tax revenues, and public assistance programs. Estimates immigrants' economic mobility by visa status and skill level as well as eligibility for benefits