Policies that support education and training, recognize foreign credentials, and provide pathways for immigrants to earn US degrees can enhance their economic assimilation.
Immigrants from China have not only caught up but have surged ahead in the US labor market, surpassing both other immigrant groups and US-born workers in terms of earnings. Over the past four decades, Chinese immigrants in the US have achieved remarkable economic success. While many immigrant groups face challenges in assimilating into the labor market, Chinese immigrants have outpaced both other immigrants and US-born workers in earnings. What explains this success?
In our recent study, we analyze data from the 1980, 1990, and 2000 US Censuses, as well as the 2010 and 2019 American Community Surveys, and the National Survey of College Graduates from 1993 to 2019. The findings are striking: as early as 1990, Chinese immigrants were already earning more than immigrants from other countries. By 2010, their earnings had surpassed those of US-born workers, and by 2019, they earned, on average, 35% more than their US-born counterparts. This upward trend sharply contrasts with the experiences of many other immigrant groups in the US.
So, what drives this economic success? The primary factor is education. Chinese immigrants tend to achieve significantly higher levels of education compared to both other immigrants and US-born workers. In 2019, 44% of Chinese immigrants held master’s, professional, or doctoral degrees, up from 23% in 1980. By comparison, only 13% of US-born workers had such degrees in 2019. Our analysis shows that this educational advantage has been crucial in elevating their earnings. Notably, earning their highest degree from a US institution significantly boosts the earnings of Chinese immigrants. Our data shows that those with US-earned degrees earn, on average, 33% more than those with degrees from other countries.
Why does a US-earned degree make such a difference? For Chinese immigrants, earning a degree in the US leads to better job matches and smoother integration into the labor market. US degrees are highly valued by American employers, signaling proficiency in specialized fields, adaptability to the US work environment, and strong English language skills. This opens doors to high-skilled, white-collar occupations—such as managerial and professional roles—that offer higher earnings and better career advancement opportunities. Additionally, while Chinese immigrants initially had lower English proficiency, it has improved over time, further enhancing their economic prospects.
These findings have significant policy implications. They highlight the importance of improving access to higher education for immigrants. Policies that support education and training, recognize foreign credentials, and provide pathways for immigrants to earn US degrees can enhance their economic assimilation. Such success not only benefits the immigrants themselves but also contributes to the economic prosperity of the host country by maximizing the potential of a diverse and skilled workforce.
Moreover, the success of Chinese immigrants suggests potential benefits in adopting elements of point-based immigration systems, like those used in Canada and Australia. These systems prioritize the selection of immigrants with higher educational qualifications and skills that meet the country’s economic needs. Incorporating similar criteria in the US could improve the economic outcomes for all immigrant groups.
However, it is crucial to recognize that not all immigrants have equal access to educational and economic opportunities. Barriers such as high tuition costs, limited recognition of foreign degrees, and lack of integration services can hinder educational attainment and economic progress. Therefore, policies should also focus on removing these barriers and providing support to ensure that economic success is inclusive and equitable.
In conclusion, the economic achievements of Chinese immigrants over the last four decades demonstrate the powerful role of education in promoting immigrant success in the US labor market. By prioritizing educational attainment in the selection of prospective immigrants and supporting them in obtaining US-recognized qualifications, policymakers can help unlock the full potential of immigrants, fostering innovation, growth, and prosperity for the US economy for years to come.
© Tony Fang, Mei Hsu, Carl Lin
Tony Fang is Full Professor and the Stephen Jarislowsky Chair in Cultural and Economic Transformation at Memorial University of Newfoundland, an Adjunct Professor with the University of Toronto, and IZA Research Fellow
Mei Hsu is Professor at National Taiwan Normal University
Carl Lin is Associate Professor of Economics at Bucknell University - a liberal arts college in Lewisburg, Pennsylvania, and IZA Research Fellow
Please note:
We recognize that IZA World of Labor articles may prompt discussion and possibly controversy. Opinion pieces, such as the one above, capture ideas and debates concisely, and anchor them with real-world examples. Opinions stated here do not necessarily reflect those of the IZA.
Related IZA World of Labor content:
Skill-based immigration, economic integration, and economic performance by Abdurrahman B. Aydemir
Using a point system for selecting immigrants by Massimiliano Tani
Language proficiency and immigrants’ economic integration by Angela Daley, Min Hu, and Casey Warman
Income-contingent loans in higher education financing by Bruce Chapman and Lorraine Dearden
Foto by Van Tay Media on Unsplash