This paper presents wage-gap profiles of a rapidly growing group of ”new”
Asian immigrants from countries that were under-represented in the US until
1965. Entry-level wages and assimilation rates fall across cohorts. However the
wage gap versus natives widens for all new Asian cohorts after the second decade
of stay, which is not seen for other immigrant groups. I use an impact of immigration
argument to investigate the difference in curvature. If occupations are
imperfect substitutes, and natives and immigrants are worse substitutes than
entrant and established immigrants within occupations, then the comparatively
larger increases in occupation-specific new Asian inflows have a more negative
impact on wages of new Asians, compared to other groups. The explanation is
studied in a nested CES framework. Elasticity parameters are estimated using
cross-metropolitan variations in occupational and immigrant labor supply. The
paper follows Card (2009) to create an instrument for regional labor supplies.
Finally, to assess the power of this explanation, I also use model estimates from
1990 to predict the wage gap between natives and new Asians in 2000 which
can be attributed to competition from increased supply of substitutes. For each
occupation, the model predicts a wage gap that is larger than the real gap -
the difference arises from gains in quality in the 1990s made possible by an
immigration policy that favored high-skill labor.