CARDIFF GARCIA, HOST:
Hey, everyone. This is THE INDICATOR FROM PLANET MONEY. I'm Cardiff Garcia.
Historically, immigrants to the United States have faced a lot of professional barriers once they arrive here - a language barrier, a lack of contacts, restrictions on where they can work and more. And on the whole, poor immigrants to the U.S. typically have not caught up to the professional success of the people born here, which sounds like it contradicts the American dream. But what if we broadened the concept of the American dream to include the children of immigrants? Well, then you get a different story.
A group of economic historians has just released a big new study of past cohorts of immigrants and their kids, and it found that the children of poor immigrants in the past have actually shown more economic mobility - they've climbed higher up the income ladder - than the children of poor American-born parents. And it also found that the children of more recent immigrants are assimilating into the economy just as well as those immigrants of the past.
So today on the show, we're going to speak with Dr. Leah Boustan, one of the authors of this new working paper, who reveals what its findings tell us about the American economy today. That is coming up right after the break.
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GARCIA: Dr. Leah Boustan, thanks so much for being on the podcast.
LEAH BOUSTAN: Thank you for having me.
GARCIA: So in this new working paper, you and your co-authors studied three different cohorts of immigrants and their children. And you studied how well they did in terms of their incomes over their lifetimes. Why don't you start by telling us about the three cohorts you studied?
BOUSTAN: Our first cohort are immigrants who were already living in the U.S. in 1880, and our second cohort were immigrants who were living in the U.S. in 1910. Those groups are pretty different from each other, actually. Immigrants that were in the U.S. in 1880 were primarily from Northern and Western Europe, so the U.K., Germany, Ireland and so on. By 1910, there was a much wider set of immigrant-sending countries, including countries from Southern and Eastern Europe, like Italy and Russia and Poland. And then our third cohort are the immigrants that we're more familiar with today, and those are immigrants from all over the world, but especially from Mexico, from Central America and from Asia.
GARCIA: OK, and what did you find?
BOUSTAN: Even though immigrants themselves are pretty slow in increasing their earnings, their children are doing remarkably well. So we focused on comparing the children of immigrants to the children of American-born parents, people who are in sort of the lower-middle class into the working poor. And we're looking at households that during the parent generation are earning around the same amount and then asked, how are the kids doing 30 years later? And all of the kids were, on average, doing better than their parents, but the children of immigrant parents were doing notably better than the children of the American parents.
GARCIA: Yeah, that's fascinating. Were you surprised by any of these findings, by the way?
BOUSTAN: We were surprised by our findings in two different ways. First, we were surprised at how similar the success of the children of immigrants were between past and present. And what we found was that immigrants today and the children of immigrants today are doing just as well as immigrants in the past at achieving social mobility and moving up the economic ladder.
And then the other thing that was surprising is we were able to break down our data by the country of origin of the parents. We thought, well, maybe there's some countries that are driving our results and are responsible for the fact that we're seeing such successful mobility. It turns out that the mobility patterns are present there for immigrants from almost every sending country in the world.
GARCIA: Yeah, that's interesting, too, because it at least suggests that the countries of origin, the places where immigrants came from, don't really matter that much for how well their kids assimilate, right?
BOUSTAN: Exactly. If you look at historical politicians and commentators, they would point to the Southern and Eastern European groups that were new at the time and say, these immigrants are not as successful as immigrants from the past, and we should start to restrict immigration as a result. And what we found is that that was not true, that Southern and Eastern European kids from those backgrounds were just as successful, if not more successful, at achieving social mobility.
And then the same thing is true for today. We were able to look at 47 different sending countries - the Caribbean, Central America, Africa, Europe, various parts of Asia. And we found that with only three exceptions, the children whose parents hailed from all of those 47 countries were achieving more social mobility than the children of American-born.
GARCIA: Yeah. Leah, and your paper also includes a kind of whodunit section where you and your co-authors try to figure out just why the children of those earlier poor immigrants - so those immigrants from 1880 and 1910 - just why their children had more social mobility than the kids with American parents. And a big part of the answer was place and specifically that the places within the U.S. that the immigrants moved to were also the places with strong labor markets, with a lot of opportunity and jobs, whereas the American-born parents were not always willing to move to those places. Can you kind of just take us through that?
BOUSTAN: So there are certain states, and then within states, certain cities and towns that seem to be associated with higher social mobility for children. Our question was, if we were to take an immigrant and an American-born household located in exactly the same place - maybe right down the street - would their children look different? And the answer we came up with was no.
So all of the differences that we find in the paper between the children of immigrants and the children of the American-born can be traced back to where immigrant families choose to locate. And a lot of that, actually, in the past was really a North-South divide. The country at the time was 15% foreign-born, but the U.S. South was around 2% foreign-born. So very few immigrants chose to go to the U.S. South at the time. And the South was a place with low social mobility opportunities for kids.
So because immigrants avoided the South and, even outside of the South, were selecting areas that had opportunities for upward mobility for their kids, that was the way that immigrants were able to help their kids move up the ladder.
GARCIA: Yeah, that is so intriguing because there is a modern conversation going on about the importance of place and what that means for jobs availability, for how much money people make and for opportunities for their kids. And this suggests that place is, in fact, a very powerful determinant for how successful people are and for how successful their children are.
BOUSTAN: Exactly. And it puts more of a role on place than it does on this sort of ineffable immigrant work ethic or immigrant culture. So you will often hear about immigrants doing well because they try harder or because they care more about education or that they have a family-based culture that's supportive. We don't want to take away from those possibilities for the present because that's not something we were able to look at. But at least for the past, it seems like geography is far more important than something intangible about being an immigrant.
GARCIA: Yeah. In terms of the modern conversation, the idea is that as the economy evolves - that a lot of jobs might be created in cities or certain urban centers and that if people are willing to move to those places, that's where they'll have a lot of economic mobility, but that Americans - people who were born here - understandably might have very close ties to where they're from, to the places where the jobs are not being created or don't pay as well.
And so there's going to be some friction there that people might not move. And immigrants don't have those ties to a U.S. place, by definition. They're coming from another country. It sort of goes to show the importance of place in that regard, and it also kind of informs the current debate, even though the data are from the past.
BOUSTAN: Well, one thing that's special about immigrants as a people is that they have revealed themselves as willing to leave home, and that's already quite a big step. As you said, I mean, it's already taking risks and striking out on your own. And so that might be the future that allow immigrants to succeed.
GARCIA: Leah Boustan, thanks so much for being on the show.
BOUSTAN: Thank you.
GARCIA: This episode of THE INDICATOR was produced by Jared Marcelle. Our intern is Nadia Lewis. Our editor is Paddy Hirsch, and THE INDICATOR is a production of NPR.
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