December 15, 2005

The Occupational Status and Mobility of Hispanics

VI. The Determinants of Socioeconomic Status

The occupational attainment of all workers improves rapidly with education. Experience in the labor market is another factor that adds significantly to a worker’s occupational status. However, the contribution of experience to a worker’s status does eventually fade over time. Two factors that are important to the success of immigrant workers are English-language skills and time spent in the United States. Not surprisingly, the lack of English-language skills depresses the status of immigrant workers. Years of experience does raise the occupational profile of foreign-born Hispanics but at a relatively slow rate. It is estimated that only college-educated immigrant workers are likely to converge to the status of white workers in the course of their working years.

This section presents the results from a statistical analysis designed to understand the contribution of various factors to the occupational attainment of Hispanic and other workers.1 Occupational attainment is measured by the socioeconomic status score of an occupation. Since the socioeconomic status score is a quantitative measure in the range of 0 to 100 it is possible to estimate the how much of a contribution is made by, say, a college degree versus a high school degree to raising the occupational status of a worker. The analysis is conducted with data from the Panel Survey of Income Dynamics (PSID). The PSID is a longitudinal dataset, i.e. it collects information from the same panel of families and individuals over time. The PSID data used in this study come from the 1990 panel which includes a larger than usual sample of Hispanic households and covers the 1990 to 1993 time period.2 The analysis of the data is designed to estimate the relationships between a worker’s characteristics and his or her occupational attainments. Absent a sudden shift in those relationships the findings from these data are just as relevant for today’s labor market.

Education, not surprisingly, has a strong impact on occupational attainment. It is estimated that with each additional year of schooling workers can attain an 8.5 percent higher score in socioeconomic status. This implies that four years of college opens doors to occupations that have a socioeconomic status score that is nearly 40 percent higher than the occupations in which high school graduates are typically employed. The impact of education does vary across sub-groups. Comparing across some racial or ethnic groups, the highest return to education—8.1 percent—is received by non-Hispanic whites. The return for native-born Hispanics is 7.1 percent and Mexican immigrants receive a 6.2 percent yield for each additional year of education. But even if these returns are somewhat lower it is clear that education has a significant effect on the occupational attainment of all workers.

Labor market experience also contributes to occupational attainment but in a more complicated manner. Experience initially leads to increases in the socioeconomic status score. However, the rate of increase diminishes with more experience and eventually the scores begin to diminish. The first year of labor market experience, for example, leads to an increase of over 2 percent in the socioeconomic status score. The return to experience decreases with each subsequent year of experience and eventually, after about 25 years of experience, turns negative. In other words, occupational attainment reaches a peak after about 25 years in the labor market. That is consistent with other research that shows a decline in the occupational mobility of workers over time along with the opportunity for advancing their socioeconomic status score.

The lack of English language skills has a detrimental effect on the achievement of Hispanic immigrants. Compared to other workers, Hispanic immigrants who do not speak English have an 8.5 percent lower occupational attainment score. However, when immigrants from Mexico and Cuba are compared among themselves, the ability to speak English emerges as an unimportant factor. In other words, immigrants from Mexico are in occupations with similar socioeconomic status scores whether or not they speak English. This suggests that, in addition to language skills, segregation by origin and occupation are also important influences on the occupational attainments of Hispanic immigrants.

The possibility that different waves of immigrants brought different levels of skills with them to the U.S. is also tested with the statistical analysis. Hispanic immigrants are first separated into different cohorts depending upon whether they arrived before 1960 or between 1960-69, 1970-79, 1980-85 and 1986-90. The statistical analysis then controls for differences in education, experience, years since migration and other attributes across cohorts. Even after those controls are applied the pattern that emerges is that earlier arriving cohorts have higher occupational attainment scores. In particular, the cohort that arrived between 1986 and 1990 has socioeconomic status scores that are 36.5 percent below the level for whites. By contrast the cohort that arrived in the 1960s had a disadvantage of 19.3 percent and the 1970s cohort lagged whites by 25.5 percent. Factors that may have contributed to this phenomenon include changes in the regional origin of immigrants and the shift in immigration laws to favor family reunification.

Regardless of the arrival cohort, the length of time Hispanic immigrants have been in the U.S. does raise their occupational attainment but the pace of improvement is slow. Relative to other workers, the socioeconomic status of Hispanic immigrants climbs at the rate of 0.7 percent per year. This means that even 30 years spent in the U.S. leads to a climb of only 23 percent up the ladder of socioeconomic status scores. It was shown earlier in Table 2 that the average socioeconomic status score of Hispanic immigrants would have to increase by about 50 percent to reach the level for whites. Thus, a 30-year career in the U.S. cuts this disadvantage by just under one-half. The pace of assimilation does proceed faster for more educated immigrants. A more detailed analysis shows that the occupational attainment of Mexican immigrants with a college degree converges to the median score for whites in about 15 years. Unfortunately, only a small minority of Mexican immigrants has earned a college degree and economic assimilation for the majority remains a slow process.

  1. numoffset=”7″ The statistical approach applies regression analysis to ascertain the relationship between the dependent variable— the socioeconomic status score of a worker’s occupation—and a set of independent variables, such as, age, education, experience, gender, race, ethnicity, nativity, years since migration, etc.
  2. The PSID data contain an occupational classification that predates the classification used in the 2000 census data. Therefore, the socioeconomic status scores used in the analysis of the PSID are also different. In particular, the analysis uses scores developed by C.B. Nam and M.G. Powers, 1983, The Socioeconomic Approach to Status Measurement, Houston, TX: Cap and Gown Press. The Nam-Powers scores are also scaled to range in value from 0 to 100 with 0 representing the lowest status.