Immigrant Wage Adjustment in Australia: Cross Section and Time‐Series Estimates*

Abstract

Cross‐sectional estimates of the comparative wage performance of natives and immigrants can be distorted if there are changes in labour market quality between immigrant cohorts. This question is investigated with a study of 1973 and 1981 cross‐sections of Australian migrants. We find that migrants from non‐English‐speaking countries entering Australia about 1965 perform significantly better between 1973 and 1981 than predicted from the 1973 cross‐section. Migrants from English‐speaking countries time‐series wage performance is consistent with the 1973 cross‐section prediction. The paper interprets the analytic importance of these results.