Academic journal article Federal Reserve Bank of Atlanta, Working Paper Series

Race, Wages, and Assimilation among Cuban Immigrants

Academic journal article Federal Reserve Bank of Atlanta, Working Paper Series

Race, Wages, and Assimilation among Cuban Immigrants

Article excerpt

Abstract: This study uses data from the 1980 and 1990 Census and the 1994-2000 Current Population Survey to examine the determinants of earnings among male Cuban immigrants in the United States by race. Nonwhite Cuban immigrants earn about 15 percent less than whites, on average. Much of the racial wage gap is due to differences in educational attainment, age at migration, and years in the United States, but the gap remains at almost 4 percent after controlling for such factors. Nonwhite Cuban immigrants also have lower returns to education than whites. A comparison to white, non-Hispanic U.S. natives indicates that nonwhite Cubans not only earn less initially than white Cubans on arrival in the United States but also do not significantly close the racial earnings gap over time.

JEL classification: J61, J15, J71

Key words: Cuba, immigrants, race


Cubans are generally regarded as among the more "successful" immigrant groups, with higher average earnings and faster wage growth rates than other groups of Hispanic immigrants (Borjas 1982; Portes and Grosfoguel 1994). However, racial differences in earnings among Cuban immigrants suggest a more complicated story. Average incomes among black Cuban immigrants were almost 40 percent less than among their white counterparts in 1990 (Garcia 1996). This study explores the extent and reasons for differences in wage levels and growth rates between white and nonwhite Cubans.

Cuba is unique among immigrant-sending countries for several reasons. First, Cuba's population is racially mixed, although estimates are sensitive to how blacks and mixed-race individuals are classified. As of 1995, the racial distribution of the Cuban population was estimated as 11 percent black, 51 percent mixed race, and 37 percent white (Central Intelligence Agency 2000). One of the stated goals of the 1959 revolution was to create a racially blind society. The Castro government promoted opportunities for blacks in employment and education, abolished all institutional forms of racial discrimination, and condemned all individual forms of racism (Pedraza-Bailey 1985).

There are several reasons why race might affect wages and wage growth among immigrants. Characteristics that affect earnings could differ systematically across racial groups. For example, nonwhites might have more limited educational opportunities in their home country or in the U.S. Employer discrimination against racial minorities also may play a role, with firms possibly offering lower wages to nonwhites than to comparable whites. The theory of segmented assimilation predicts that immigrants' path of adaptation to their new country depends on factors such as race (Portes & Rumbaut 1996). Given the substantial racial differences in labor market outcomes between whites and blacks in the U.S. (e.g., Waters & Eschbach 1995), segmented assimilation theory predicts that black immigrants are less successful in the U.S. labor market than are white immigrants from the same country, all else equal. Earnings growth over time in the U.S., or assimilation--the process of immigrants' wages catching up to the earnings of natives as immigrants acquire experience in the U.S. labor market--may therefore depend in part on race.

Although there is a large literature on wages and assimilation among immigrants, relatively few studies have examined racial differences in immigrants' earnings. Nonblack immigrants earn about 22 percent more than black immigrants, about two-thirds of which is due to differences in characteristics, based on 1980 Census data (Daneshvary & Schwer 1994). Data from 1980 Census also suggest that black immigrants experience smaller relative earnings gains over time in the U.S. than white immigrants (Butcher 1994). However, the results cannot be used to directly compare assimilation between black and white immigrants because each group is compared to natives of the same respective race. …

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