Immigrant Groups That Are More Skill-Selected Have Higher Average Incomes

There is a strong positive correlation between skill-selectivity and average income across immigrant groups in the USA; Taiwanese are the most skill-selected, Mexicans the least

Reacting to Mr Trump’s comments about immigrants from… less economically developed countries, Scott Sumner points out that some immigrant groups have surprisingly high average incomes. For example, both Nigerian Americans and Ghanian Americans earn more than average. The reason being that, as Professor Sumner notes, immigrants from Nigeria and Ghana tend to be very skill-selected; only the most highly educated Nigerians and Ghanians migrate to the USA.

But just how strong is the relationship between skill-selectivity and average income across immigrant groups? I took data on average income from the same source as Professor Sumner––which appears to be based on figures from the American Community Survey. And I took data on skill-selectivity for 2010 from the IAB Brain Drain dataset. This dataset reports, for each of 20 OECD countries, the number of immigrants in three skill-levels, broken down by country of origin. (See the methodological note for further details.)

The chart below shows the relationship between log median household income and a skill-selectivity contrast (percentage high-skilled migrants minus percentage low-skilled migrants). A contrast was used because it predicted log median household income slightly better than either percentage high-skilled migrants or percentage low-skilled migrants did on its own.

Overall, the relationship is strong and positive (r = .56, p < 0.001): immigrant groups that are more skill-selected tend to have higher average incomes. The five most skill-selected groups are: Taiwanese, Nigerians, Swedes, Indians and Swiss. The five least skill-selected groups are: Mexcians, Salvadorans, Hondurans, Portuguese and Cape Verdeans. For example, 82% of Nigerians are high-skilled, while only 4% are low-skilled. By contrast, only 14% of Mexicans are high-skilled, while 57% are low-skilled.

Methodological caveats: I was unable to match a number of the ancestry groups (e.g., ‘Hmong’, ‘Jewish’, ‘Cajun’); the income data are not adjusted for household size or reporting bias.