June 11, 2018 –

In the United States, immigration based on family ties has long been the main criterion for admitting new immigrants. Under the provisions of current immigration law, the family-based immigration category allows U.S. citizens and lawful permanent residents, or “green card” holders, to bring certain family members to the United States. Much has been debated about family-based immigration and the critical role families play in the adaptation, integration, and wellbeing of newcomers. But some confusion exists regarding the economic aspects of family-based immigration. To help unpack those aspects, this report focuses on one of them—namely, the earnings of family-based immigrants.

A defining feature of immigrants coming to the United States via the family-based system is their upward economic mobility. Since 1965, when family-based immigration became the dominant means of migrating to the United States, the earnings of immigrants in general have increased dramatically during their first decade in the country. This trend is completely missed when economists focus only on the initial earnings of immigrants upon their entry into the U.S. labor market.

In this report, we use data from the decennial census—matched with data on admissions criteria from the Immigration and Naturalization Service (INS)—to examine the earnings gains over time of all immigrants, as well as the earnings gains experienced by family-based immigrants compared to employment-based immigrants.

Our analysis indicates that immigrants overall experience large earnings increases as their time in the United States increases. Additionally, working-age immigrant men who come to the United States via family-based channels tend to experience a much greater rate of earnings growth over time than those who come through employment-based channels. This occurs despite employment-based immigrant men having higher initial earnings than those who are family-based. This initial advantage in earnings is not surprising given that employment-based immigrants are admitted explicitly for the purpose of filling the immediate labor demands of employers. But the lower average earnings of family-based immigrant men when they first enter the U.S. labor market subsequently increase at a much higher rate than the earnings of employment-based immigrant men. This suggests that the earnings path of family-based immigrants throughout their lives is a much better indicator of their economic potential than their initial earnings upon arriving in the country.

We argue that the upward trajectory in earnings among family-based immigrants is the product of the high rate of investment that they make in their own human capital (education and training) in order to acquire new skills that will improve their employment prospects. From this perspective, low initial earnings by family-based immigrants cannot be dismissed as an inefficient use of their skills and abilities. Instead, it becomes apparent that family-based immigrants contribute to the long-term economic productivity of the United States.

The economic role of family-based immigrants extends beyond the earnings growth that is driven by the investments they make in their own skills and education (human capital). Census and INS data also indicate that skilled immigrants who enter the country through the employment-based system are often followed by highly educated siblings who enter via the family-based system. Likewise, there is a significant relationship between the share of immigrants admitted through the sibling category of the family-based system and the propensity to be self-employed. This suggests that siblings play an important role in family business formation.

Unfortunately, the economic importance of family-based immigrants is not widely recognized among U.S. lawmakers. Much immigration-reform legislation introduced in Congress—such as the 2013 Senate immigration reform bill and the 2017 Reforming American Immigration for Strong Employment (RAISE) Act—would sacrifice some family-based immigrants for the sake of more “merit-based” immigrants, who would be admitted on the basis of certain human-capital attributes. The legislation does not reflect that both family- and employment-based immigration, the core components of the current U.S. immigration system, are economically powerful. In fact, they complement each other. Employment-based immigrants fill immediate labor needs and family-based immigrants provide a flexible workforce that will readily adapt to future changes in labor demand.

DOWNLOAD THE REPORT: The Immigrant Success Story: How Family-Based Immigrants Thrive in America.

The American Immigration Council, a 501(c)(3) nonprofit, is a powerful voice in promoting laws, policies, and attitudes that honor our proud history as a nation of immigrants. Through research and policy analysis, litigation and communications, and international exchange, the Council seeks to shape a twenty-first century vision of the American immigrant experience. www.americanimmigrationcouncil.org