Assimilation via Prices or Quantities? Sources of Immigrant Earnings Growth in Australia, Canada, and the United States

Using 1980/81 and 1990/91 census data from Australia, Canada, and the United States, we estimate the effects of time in the destination country on male immigrants’ wages, employment and earnings. We find that total earnings assimilation is greatest in the United States and least in Australia. Employment assimilation explains all of the earnings progress experienced by Australian immigrants, while wage assimilation plays the dominant role in the United States, with Canada in between. We argue that relatively inflexible wages and generous unemployment insurance in countries like Australia may cause assimilation to occur along the “quantity” rather than the price dimension.