Economic Assimilation of Asian Indians in the United States: Evidence from the 1990s

The United States has traditionally been (and will continue to be) a favoured migration destination for many Indians. Although a large number of Indians move to the United States as students, many choose to stay behind, struggle, and eventually become valuable members of their labour force. According to the Migration Policy Institute, Indian immigrants in the United States represented the third-largest immigrant group by country of origin, behind Mexico and China. The share of Indian immigrants among all foreign born in the United States grew from less than 0.5 percent in 1960 to almost 5 percent in 2011.

500px Flag of the United States.svg1  Do Indians Succeed In The United States

 

An interesting question related to this is how well do Indians do economically in the United States?  In other words, are Indians, who choose to stay back in the United States, able to assimilate economically into the economy over time? Do their earnings converge with the earnings of people born in the United States or with the earnings of other immigrants?

A recent paper by Tiagi (2013) provides some interesting insights. According to the author, although the recent- arrival cohort of Indian men and women earn significantly less than native-born whites, their wages exhibit substantial growth within 16 to 20 years, reducing the wage differential by about 60% for males and by 80% for females.  Nevertheless, the wages of Indian men and women do not reach parity with the wages of native-born whites.

In terms of comparisons with other immigrants, the paper shows that Other Asians, like Indians, face a wage penalty when they start out in the U.S. labor market. However, not only is this penalty larger than the penalty faced by Indians, but the group also assimilates more slowly in the U.S. economy.

The paper suggests that Indians are “model immigrants” in the US and that the country would do well to enact policies and have rules and regulations that are able to attract more people from this group. After all, faster assimilation implies less dependence on government assistance and welfare programs.

By Raaj Tiagi

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Economic Assimilation of Asian Indians in the United States: Evidence from the 1990s

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