Intergenerational mobility of immigrants and effect of immigrants on natives

In Chapter 1, I analyze intergenerational mobility of immigrants and natives in Germany. Using the German Socioeconomic Panel (GSOEP), I find intergenerational elasticities that range from 0.19 to 0.26 for natives and from 0.37 to 0.40 for immigrants. These elasticity estimates are lower than typically found for the U.S. and imply higher mobility in Germany than in the U.S. However, as in the U.S., I find greater mobility among German natives than among immigrants. Moreover, I investigate to what extent the lower mobility among immigrants in Germany is due to "ethnic capital" as suggested by Borjas (1992). I find that the impact of father's earnings on son's earnings remains virtually unchanged when including a measure of ethnic capital, suggesting that the higher father-son correlation found among immigrants is not due to omitting ethnic capital. However, I do find a large independent effect of ethnic capital on sons' earnings (the coefficient is 0.81 as opposed to 0.25 found by Borjas (1992)). These results are consistent with estimates from Microcensus data, where the combined effect of parents' and ethnic capital is close to unity. Thus, contrary to the U.S. results which suggest convergence of immigrants' earnings towards natives' earnings, the German results suggest divergence of immigrant earnings.; In Chapter 2, effect of low-skilled immigration on U.S. natives analyzed. Starting in the 1980s, the composition of immigrants to the U.S. shifted towards less-skilled workers. Around this time, real wages and employment of younger and less-educated U.S. workers fell. Some believe that recent shifts in immigration may be partly responsible for the bad fortunes of unskilled workers in the U.S. On the other hand, low-skilled immigrants may complement relatively skilled natives. OLS estimates using Census data show that wages and employment are positively related to immigrant Latin American shares by state and year. However, these estimates are likely to be biased if immigrants move towards regions where there is high demand for their skills. An IV strategy, which exploits a large influx of Central American immigrants, who were quickly legalized and who moved towards U.S. Southern ports of entry after Hurricane Mitch, generates positive wage effects for College and High School-educated native men and women and earlier Latin American immigrant men but not for less-educated workers. These results are robust to controls for outmigration by earlier immigrants in response to recent Latin American immigration, suggesting that low-skilled immigrants complement high-skilled natives. We also find some evidence of negative employment effects on less educated natives when we control for potential outmigration, suggesting that recent immigrants may also substitute for less-skilled natives.