Intergenerational Mobility of Immigrants in 15 Destination Countries

In 2019, 10-30% of the population of most OECD countries was born abroad. There are many reasons why people migrate to a different country.  Chief among these are economic opportunities: people dream of better economic outcomes for themselves and for their children; and moving somewhere else to realize those dreams is often the only solution. 

But do migrants indeed find prosperity in their destination countries? Equally important, do migrant children compare well with their native counterparts? 

The National Bureau of Economic Research recently released a working paper on income mobility in 15 destination countries, 11 in Europe, the US, Canada, Australia and New Zealand. The authors (a large number of them) compiled and harmonized national tax and population data regarding first and second-generation immigrants to these destination countries. Specifically, the data refers to immigrant parents working in the 1994–2000 period, as well as their children, born between 1978 and 1983 and working in the 2014–2015 tax year. (One limitation of the data is that immigrants often work informally and out of sight of the tax authority.)

The figure below summarizes the data. The vertical axis measures the income rank point gap with respect to the native population, so a value below the dashed line corresponds to being below the mean. Bullets correspond to first-generation immigrants, triangles to second-generation immigrants. The arrows connecting bullets and triangles show the direction of change from parents to children, so an upward arrow corresponds to upward mobility. Finally, the data for men are in blue and for women in red.

The data shows that, with a few exceptions, first-generation immigrants fall below the mean income rank. However, second-generation immigrants typically move to a far better position (upward arrows), with most of them getting to a position at or slightly above the mean (equality line). Notable exceptions are given by Austria and Spain, where second-generation immigrants perform worse than their parents. Last but not least, it is also noticeable that, while first-generation men and women are at approximately the same income level, the upward trend in their children’s position is particularly significant for daughters.

Diving deeper into the cross-country data analysis, the authors uncover additional new facts. For example, in most destination countries daughters of immigrants have higher income than daughters of local-born raised at the same point in the income distribution. By contrast, sons of immigrants only enjoy this advantage in non-European countries with long histories of immigrant incorporation (Australia, Canada, Israel and the US), as well as in the UK. Otherwise, sons of immigrants often have lower income than their native counterparts.

Leah Boustan et. al.

Intergenerational Mobility of Immigrants in 15 Destination Countries

National Bureau of Economic Research (NBER) Working Paper 33558