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Demographics

Why Are Recent Immigrants Better-Educated Than Ever Before?

In a previous blog post, I described two significant changes in the characteristics of newly arriving immigrants (legal and unauthorized) to the U.S. between 1997 and 2017. First, the share of recent immigrants aged 25 and older who had bachelor’s or advanced degrees rose from 30 percent to 48 percent. Second, the origins of new immigrants to the U.S. shifted dramatically, as immigration from Mexico and Europe declined in importance while immigration from Asia and Africa grew. In this post, I examine the relationship between these two changes.

Recent Immigrants Are Better-Educated Than Ever Before

From 1997 to 2007, a newly arrived adult immigrant to the United States was about as likely to have a college degree as to have not finished high school. During that period, each group accounted for about one third of new arrivals (including both legal and unauthorized immigrants). Over the decade since 2007, those odds changed dramatically. The share of recent immigrants with a college degree grew by nearly 50 percent, while the share without a high school degree fell by a similar proportion (see Figure 1). By 2017, a recently arrived immigrant was almost three times as likely to have a college degree as to have not finished high school.

For Teen Workers, Parents’ Education Matters

Teenage employment has declined significantly since the late 1990s. Using data from the Current Population Survey, Figure 1 shows that 63 percent of teens aged 16 to 18 worked in 1993, but that percentage fell to 41 by 2015.

Education and Income Growth

In the New York Times article “Why Is It So Hard for Democracy to Deal with Inequality?” Thomas B. Edsall relates the growth of income inequality in democracies to changes in voting patterns among those who are highly educated.

PWBM’s brief, “Education and Income Growth” was used to highlight that the incomes of highly educated people are growing in comparison to those with less education. The author finds that this trend motivates highly educated voters to support the continuation of current policy rather than policy reforms favorable to the working class.

W2018-1 Matching IRS Statistics of Income Tax Filer Returns with PWBM Simulator Micro-Data Output

The Decline in Labor Efficiency in the United States

The Decline in Labor Efficiency in the United States
  • Workers’ performance on the job is related to all of their demographic and economic attributes, including education, age, family structure, gender, race, labor force status (full- or part-time work), peer group (birth-year), and others.
  • The annual market-wide “effective labor input” depends upon the quantity (number of work hours contributed) and the efficiency (related to worker attributes) of individuals engaged in market production.
  • Labor efficiency is projected to decline in the future and offset growth in labor quantity to slow growth of aggregate “effective labor input.” Official government analysts typically do not project changes in labor efficiency, thereby imparting a more optimistic outlook to budget projections.

Population Aging

Population Aging
  • As in many of the world’s developed nations, America is undergoing a momentous increase in the share of older individuals in the population, or “population aging.”

  • Population aging will continue throughout this century because of baby-boomer retirements, longer lifespans due to declining mortality, and fewer newborns from reduced fertility.

  • Sustained population aging will pose a significant fiscal challenge: How best to provide funding for adequately supporting older generations’ consumption and health care.

Socioeconomic Patterns of Marriage and Divorce

Socioeconomic Patterns of Marriage and Divorce
  • U.S. divorce rates remain high and the post-1970s marriage decline is continuing.
  • The marriage decline is concentrated among those with fewer years of education.
  • Low earnings and job insecurity induces single-parenthood with negative side effects on children.

Mortality in the United States: Past, Present, and Future

Mortality in the United States: Past, Present, and Future
  • The United States experienced an unprecedented decline in mortality during the twentieth century, thanks to improvements in public health, medical advances, and behavioral changes.
  • But mortality and life expectancy improvements have been uneven across age and socioeconomic status.
  • Future changes in mortality will affect the federal budget outlook. However, projections of mortality and life expectancy are highly uncertain. This uncertainty creates additional risk for the nation’s transfer programs to the elderly, which already account for half of government outlays.

The Effects of Immigration on the United States’ Economy

The Effects of Immigration on the United States’ Economy
  • While some policymakers have blamed immigration for slowing U.S. wage growth since the 1970s, most academic research finds little long run effect on Americans’ wages.

  • The available evidence suggests that immigration leads to more innovation, a better educated workforce, greater occupational specialization, better matching of skills with jobs, and higher overall economic productivity.

  • Immigration also has a net positive effect on combined federal, state, and local budgets. But not all taxpayers benefit equally. In regions with large populations of less educated, low-income immigrants, native-born residents bear significant net costs due to immigrants’ use of public services, especially education.

Emergent Changes in American Demography and Social Organization

Emergent Changes in American Demography and Social Organization
  • The American Family is changing in response to the pressures and opportunities facing young individuals.
  • Many children today are being raised by single parents, which is associated with a lower transmission of skills to succeeding generations.
  • Technological advances and public provision of social protection benefits appear to be contributing to the decline of the nuclear family.

The Economic Determinants of Fertility Choices

The Economic Determinants of Fertility Choices
  • The demographic transition toward an older population is ongoing in America and Europe. The transition began earlier in Europe where fertility rates have declined much more. Will America follow in Europe’s footsteps?
  • Procreation and family formation appears influenced by the social and economic conditions facing young adults. Younger American women appear to be postponing childbirth. Will this reduce future American TFR to still lower levels?
  • Government policies influence the economic environment and affect fertility choices indirectly. Social Security and various retiree health programs have likely reduced fertility, making their own financing more difficult.

Fertility in the United States: Hanging On?

Fertility in the United States: Hanging On?
  • The baby bust of the 1960s saw the U.S. total fertility rate (TFR) dip to just below the 2.1 live births per woman needed to prevent population decline.
  • U.S. TFR fell again after the Great Recession of 2008-09, which eroded women’s and couples’ economic ability to bear and raise children.
  • Large and persistent declines in European fertility to well below the 2.1 threshold is a worrisome precursor: America’s budget problem of funding elder-care would worsen if the U.S. TFR meets with the same fate as that of Europe.