Self-selection and economic assimilation of immigrants: the case of Iranian immigrants arriving to three countries during 1979-1985

Yitchak Haberfeld, Tel Aviv University
Christer Lundh, University of Gothenburg

The patterns of immigrant self-selection from their source countries and the characteristics of the host countries have been depicted as the main determinants of immigrants’ economic assimilation. The present study is designed to evaluate the combined impact of both factors on immigrants' economic assimilation. The situation to be studied could be characterized as a natural experiment: immigrants originated from one country and immigrated during the same period to three different destination countries. We study immigrants who left Iran right after the Islamic revolution, and arrived during 1979-1985 to the US, Israel, and Sweden. Such a situation allows us to compare three immigrant groups that probably differ in both observed and unobserved attributes, and three destination countries that differ in their migration policies and labor market characteristics. Consequently, the explanatory power of the impact of immigrants’ self-selection combined with the impact of country-specific characteristics on economic assimilation is high due to the experiment-like situation. To analyze Iranian immigrants who came to the three countries during 1979-85 at the age of 22 or higher upon arrival, the 5% 1990 and 2000 Public Use Microdata files (PUMS) of the US census, the 20% demographic samples of the 1983 and 1995 Israeli censuses of population, and the 1990 and 2000 Swedish registers were used. The results indicate that the “most qualified” immigrants – both on observed and unobserved variables - who left Iran right after the Islamic revolution, arrived in the US. Their positive self-selection led them to reach complete earnings assimilation with natives there. Iranian immigrants who arrived in Israel and Sweden did not achieve full earnings assimilation with natives. Of these two groups, Iranian immigrants in Sweden showed better assimilation than their counterparts in Israel. The market structure played a certain role in immigrants’ earnings assimilation in Sweden only.