Income Inequality among Legal Immigrants in the U.S.: Impacts of STEM Major and Inter-State Relocation

Qian He, University of Wisconsin-Madison

There is an ongoing trend of earnings polarization among immigrants of different skills in the U.S. society. In this paper, I suggest that heterogeneous returns to higher education and internal migration could explain variations in immigrants’ earnings independently. Using national representative sample data from the New Immigrant Survey (NIS 2003) and American Community Survey (2010), I test for two aspects of heterogeneous returns to higher education controlling for individual characteristics. Preliminary results from NIS suggest that (1) immigrants with STEM backgrounds enjoy substantial income premium over those with non-STEM backgrounds; (2) country of the highest degree matters, supporting several recent studies. Another key finding is that immigrants who have relocated across states are at earnings advantage than counterparts who are settled within the same states upon first arrival, suggesting migration to better returns.