RAND Study Shows Hispanic Immigrants Move Up Economic, Educational Ladder As Quickly As Other Immigrant Groups

For Release

May 22, 2003

A new RAND study shows that Hispanic immigrants to the United States and their children move up the economic and educational ladder across generations just as quickly as European immigrants did generations earlier.

“These findings run counter to the prevailing view that there is something in the system that holds Hispanic immigrants back,”RAND economist James P. Smith said. “Based upon our experience with history, the children and grandchildren of Hispanic immigrants progress up the educational and income ladder in the same way as immigrants who came here from European countries.”

While these generational improvements exist for all Hispanics combined, they also characterize the most numerically important Hispanic group— those from Mexico.

The descendants of immigrants from Mexico and other Hispanic nations complete substantially more schooling and have higher incomes than the generation before, according an article by Smith published in the May edition of the American Economic Review, the most prestigious and widely read scientific journal in economics.

The advancement up the educational and economic ladder is similar to that seen among earlier generations of European immigrants and leaves third-generation Hispanic descendants only about 10 percent behind their white counterparts in relative incomes, Smith reported.

The generation-to-generation educational gains made by Hispanic men are greater than that seen among native-born white and African American men. However, by the third generation the educational gains appear to drop off as Hispanics begin to look much like the rest of the U.S. population, the RAND research found.

“A lot of the success we have seen from immigrants groups is because of the strong American school system,” Smith said. “If the schools fail to deliver, then we have a problem. While history provides an optimistic lesson, there is no guarantee that new immigrants will keep moving upward unless we continue to have a sound educational system.”

Smith said his findings differ from earlier research because he looked at Hispanic immigrants over a long period of time, which allowed him to more accurately compare succeeding generations. Smith examined the economic and educational progress of Hispanic men over the past 100 years by bringing together information from more than a dozen studies from the U.S. Census Bureau and other sources. While his article only examines men, in ongoing work Smith finds that similar generational progress exists for Hispanic women.

Previous studies have contrasted different generations of Hispanics by examining different generations from a single snapshot in time. That approach incorrectly compares the second and third generation Hispanics of the same age in the same year, rather than comparing them with their actual predecessors of 25 and 50 years earlier, Smith said.

For example, a report that looks at information from 1970 comparing a 40-year-old third-generation Hispanic man with a 40-year-old second generation Hispanic man is not going to provide an accurate picture of their families' economic and economic progress.

“When you study Hispanic generations in one slice of time, the growth in income and educational status gets lost because there is still a large number of Hispanic immigrants,” said Smith, holder of the RAND Corporate Chair in Labor Markets and Demographic Studies.

Earlier studies have painted a pessimistic picture of Hispanic immigration, with some suggesting that the immigrants gain only one additional year of education from the first to third generations. The same research found equally small gains in incomes among Hispanics from generation to generation.

Previous researchers have proposed several reasons for the observations, including the suggestion that Hispanics were less committed to assimilation than other immigrants. Discrimination, adherence to the Spanish language and frequents trips to their native countries are other reasons that have been proposed.

Smith's analysis paints a far more optimistic portrait of Hispanic immigrants that looks similar to other ethnic groups. For example, Mexican immigrants born early in the early 20th century had an average four years of schooling. Their American-born sons doubled that schooling, with the third generation descendants graduating from high school.

Similar income gains are seen over time. Hispanic male immigrants born in the late 1890s earned just 55 percent as much over their lifetimes as native-born white men, according to Smith's research. That wage gap narrowed to 25 percent for Hispanic immigrants' U.S.-born sons and to 16 percent for the third generation.

After adjusting the wage difference to account for the differences in skills caused by educational differences, the wage disparity declines to 10 percent, Smith said.

Tracking the advancement of Hispanic immigrants is particularly challenging because the educational level of immigrants has fluctuated over time. While the educational level of Hispanic immigrants rose in the early 1900s, it began dropping in the 1920s, before rising again beginning in the 1950s, according to the study.

This study is not currently available online; however, the American Economic Review website may have additional information.

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