An Evaluation of Skilled Immigration in the United States

Abstract

This dissertation examines skilled immigration in the context of labor and health economics. The research focuses on the high-skilled labor market, whereas previous studies either treat all immigrants as a homogeneous group or focus on the low-skilled. The first essay investigates the wage consequences of high-skilled immigration. The second essay evaluates the international transferability of human capital in nursing. The third essay examines immigrant-native health insurance disparities. The first essay evaluates the effect of high-skilled immigrants in science and engineering on wages of similarly skilled U.S. natives. The extensive literature on all immigrants finds no significant impact of immigration on native wages. Empirical results cannot reject the hypothesis that immigrants and natives are perfect substitutes within the same skill group. The instrumental variable (IV) estimates show that a ten percent increase in employment due to an influx of high-skilled immigrants reduces wages of natives in the same occupation by 2.8 to 4.4 percent. These results are consistent with theoretical predictions that increased labor supply puts downward pressure on wages. The second essay investigates the transferability of foreign human capital in the occupation of nursing. The immigration literature shows that the returns to foreign education are lower, though previous studies typically use indirect information on foreign education or ignore the heterogeneous nature of foreign human capital across occupations. The labor market for nurses is especially important because of the growing nursing shortage and its potentially negative impact on quality of health care. The estimates reveal that nurses who obtained basic nursing education outside the U.S. earn a premium relative to U.S.-educated nurses. In addition, immigrant nurses with only foreign education do not suffer a wage penalty. These estimates contrast with past research and highlight the heterogeneity in the value of foreign human capital. The results also suggest foreign education penalty in occupations with licensing requirements should be minimal. The third essay examines the immigrant-native disparity in health insurance coverage. The analysis illustrates that immigrants have lower rates of health insurance coverage, controlling for demographic characteristics, employment, income, risk attitude, and health status. Though less-educated immigrants are at a larger disadvantage than well-educated immigrants, a significant immigrant-native coverage gap still exists in the highly-educated population. Conditioning on working for an employer that provides insurance, immigrants, regardless of education level, are less likely to take up coverage.