There has been a resurgence of large-scale immigration in
the United States and in many other countries in recent
decades. Not surprisingly, the impact of immigration on
economic conditions in the receiving country is often a topic of
contentious policy debate. In the U.S. context, this concern has
motivated a great deal of research that attempts to document
how the U.S. labor market has adjusted to the large-scale
immigration in the past few decades. Much of this research has
focused on analyzing the determinants of the skill composition
of the foreign-born workforce (see the survey in Borjas [1994]).
This analytical focus can be easily justified by the fact that the
skill composition of the immigrant population is perhaps the
key determinant of the social and economic consequences of
immigration.
For example, the connection between the skill composition
of the immigrant population and the fiscal impact of
immigration is self-evident. The many programs that make up
the welfare state tend to redistribute resources from highincome
workers to persons with less economic potential.
Skilled workers, regardless of where they were born, typically
pay higher taxes and receive fewer social services.
Skilled immigrants may also assimilate quickly. They might
be more adept at learning the tools and “tricks of the trade”
that can increase the chances of economic success in the
United States, such as the language and culture of the
American workplace. Moreover, the structure of the American
economy changed drastically in the 1980s and 1990s, and now
favors workers who have valuable skills to offer (Katz and
Murphy 1992). It seems, therefore, as if high-skill immigrants
would have a head start in the race for economic assimilation.