The socioeconomic performance of today's workers depends not only on parental skills, but also on the average skills of the ethnic group in the parents' generation (or ethnic capital). This paper investigates the link between the ethnic externality and ethnic neighborhoods. The evidence indicates that residential segregation and the external effect of ethnicity are linked, partly because ethnic capital summarizes the socioeconomic background of the neighborhood where the children were raised. Ethnicity has an external effect, even among persons who grow up in the same neighborhood, when children are exposed frequently to persons who share the same ethnic background.

This paper analyzes the way in which the earnings of the immigrant population may be expected to differ from the earnings of the native population because of the endogeneity of the decision to migrate. The empirical study shows that differences in the U.S. earnings of immigrants with the same measured skills, but from different home countries, are attributable to variations in political and economic conditions in the countries of origin at the time of migration.

The existence of significant wage differentials among "similar" individuals employed by different agencies in the federal government is explored. The theoretical framework proposes that the underlying reason for these differentials may be linked to the political influence exhibited by the constituencies and bureaucracies of federal agencies. The empirical results indicate that employees in federal agencies with small and well-organized constituencies and with bureaucracies that apparently share common interests generally receive higher wage rates. In fact, a small number of variables measuring these political factors explains about two-thirds of interagency wage differentials.

This article investigates if the location choices made by immigrants when they arrive in the United States are influenced by the interstate dispersion in welfare benefits. Income-maximizing behavior implies that foreign-born welfare recipients, unlike their native-born counterparts, may be clustered in the states that offer the highest benefits. The empirical analysis indicates that immigrant welfare recipients are indeed more heavily clustered in high-benefit states than the immigrants who do not receive welfare, or than natives. As a result, the welfare participation rate of immigrants is much more sensitive to changes in welfare benefits than that of natives.

"This article uses the 1970, 1980, and 1990 Public Use Samples of the U.S. census to document what happened to immigrant earnings in the 1980s and to determine if pre-1980 immigrant flows reached earnings parity with natives. The relative entry wage of successive immigrant cohorts declined by 9% in the 1970s and by an additional 6% in the 1980s. Although the relative wage of immigrants grows by 10% during the first 2 decades after arrival, recent immigrants will earn 15%-20% less than natives throughout much of their working lives."

This article analyzes the intergenerational mobility of immigrants. Using the 1940-70 censuses, the study reveals an important link between the earnings of immigrants and the earnings of their American-born children. Although there is some regression toward the mean, the earnings of second-generation Americans are strongly affected by variables describing economic conditions in the source countries of their parents. Current immigration policy, therefore, not only determines how immigrants perform in the labor market but also determines tomorrow's differences in the labor market experiences of American-born ethnic groups.

This paper reexamines the empirical basis for two "facts" that seem to be found in most cross-section studies of immigrant earnings: (1) the earnings of immigrants grow rapidly as they assimilate into the United States; and (2) this rapid growth leads to many immigrants' overtaking the earnings of the natives within 10-15 years after immigration. Using the 1970 and 1980 U.S. censuses, this paper studies the earnings growth experienced by specific immigrant cohorts during the period 1970-80. It is found that within-cohort growth is significantly smaller than the growth predicted by cross-section regressions for most immigrant groups. This differential is consistent with the hypothesis that there has been a secular decline in the "quality" of immigrants admitted to the United States.

This essay revisits the argument that the removal of worldwide immigration restrictions would induce a very large increase in world GDP. The recent books Exodus: How Migration is Changing Our World by Paul Collier and The Price of Rights: Regulating International Labor Migration by Martin Ruhs raise a number of questions about the underlying economic model. The essay shows how these concerns can greatly attenuate the predicted gains.