We also argue that, when evaluating the pace of immigrant assimilation, methods matter. 4 However, there was a substantial degree of heterogeneity in immigrants' skills and earnings across sending countries, including some immigrant groups that out-earn natives from the outset. Smaller earnings gaps in the past are consistent with the fact that immigrants primarily hailed from European countries that, though poorer than the US, were not as dissimilar in development to the US as are sending countries like Mexico and China today. The major difference between the past and present is that, circa 1900, typical long-term immigrants held occupations similar to the native born, even upon first arrival, whereas today the average immigrant earns less than natives upon arrival to the US. As a result, immigrants who held lower-paid occupations than natives upon arrival to the US did not catch up with natives over a single generation. Long-term immigrants in both periods have experienced occupational or earnings growth at around the same pace as natives.
Second, both in the past and today, the evidence is not consistent with the common perception of the “American dream,” whereby immigrants arrived penniless and eventually caught up with US natives. But the fact that recent immigrants are not negatively selected – even from destinations that are more unequal than the US, as would be predicted by the classic Roy model of self-selection – may be explained by the growing selectivity of US immigration policy over time, or by rising costs of (often undocumented) entry due to strict immigration restrictions. 3 The rise in income inequality in the US can help explain the increasingly positive selection of immigrants seeking to take advantage of the high returns to skill in the US. Whereas, in the past, migrant selection patterns were mixed, with some migrants positively and others negatively selected from their home countries on the basis of skill, migrants today are primarily positively selected from source country populations, at least on observable characteristics. First, the nature of migration selection appears to have changed over time. Reviewing the historical and contemporary evidence side by side yields a number of insights. In each case, we present studies covering the two main eras of US immigration history, the Age of Mass Migration from Europe (1850-1920) and the recent period of renewed mass migration from Asia and Latin America. In this essay, we address three major questions in the economics of immigration: whether immigrants were positively or negatively selected from their sending countries how immigrants assimilated into the US economy and society and what effects that immigration may have on the economy, including the effect of immigration on native employment and wages. These fears have influenced historical immigration policy and are echoed in contemporary debates. 1 Yet, both in the past and today, US natives have expressed concern that immigration lowers wages and that new arrivals fail to assimilate into US society. The United States has long been perceived as a land of opportunity, a place where prospective immigrants can achieve prosperity and upward mobility.