Are Foreign Migrants More Assimilated Than Native Ones?

Abstract

The novelties of the paper are two. First the paper compares the pattern of wage assimilation of foreigners with both native immigrants and local natives in Italy, a country with large internal and international migration. This comparison demonstrates the role played by language and knowledge of social capital in the assimilation of immigrants relative to both natives and internal immigrants. Second we model new corrections of the selection bias due to return migration. In the wage equation we correct for selection bias through a duration extension of the traditional Heckman correction term and alternatively we use a hazard rate correction. The empirical test use the Italian administrative dataset on dependent employment (WHIP), to estimate a fixed effect model of the weekly wages of males aged 18-45 with controls for selection in return migration and unobserved heterogeneity. The three groups of workers start their careers at the same wage level but, as experience increases, the wage profiles of foreigners and natives, both immigrants and locals, diverge. A positive selection in the returns prevails, with both corrections, so that the foreign workers with lower wages are the most likely to stay in Italy. Also an “ethnic” skill differential emerges.