May 28, 2002

Work or Study

Different Fortunes of U.S. Latino Generations

The Latino labor force is experiencing a major generational shift as increasing numbers of today’s young native-born Latino Americans become workers. This report describes the wage, employment outcomes, and labor market attachment of Latino adults by age and generation during the economic expansion of the late 1990s.

This report’s key contribution is generational comparisons by age that show that generational outcomes vary strongly by age. The behavior of teens and young adults diverges sharply from adults over the age of 25. The teenage years appear to be a critical period for Latino youth as they make very important choices on working full-time versus part-time and whether to pursue schooling or not.

Overall, the data analyzed in this report present a mixed picture with as many optimistic indicators as there are troubling ones. Clearly, when the U.S. economy is growing rapidly, as it did in the late 1990’s, the labor market affords extraordinary opportunities to immigrant youth. Even those with very little experience in the U.S. labor market can find steady work. When they are in their late teens, immigrant youth do better than the native born. This is a short-lived advantage, however. Wages for immigrant youth start low and stay low through adulthood. By age 25, second generation Latinos eclipse their immigrant counterparts. Lacking exposure to U.S. schools, the immigrants’ narrow focus on the employment world puts them on a sub par earnings path relative to second generation teens. Meanwhile, the schooling endeavors of second-generation teens
likely will reap larger labor market payoffs later in life because rates of return to educational attainment are substantial for native-born Latinos.