How much wage gain by migrating to the U.S.?

I recently posted about the higher output in scientific research in the U.S. Now let’s look at the wage impact of a less educated worker migrating from a developing country to the U.S. It turns out that the person’s real wage goes up four times, and this is due largely to higher productivity in the U.S.

Researchers estimated the income differences between 42 developing countries and the United States. They focused on males 35–39 years old, with nine to twelve years of education acquired in the their home country. They used the real cost of living gap. (For example, in 2021 you can have the same standard of living in Colombia with 43% of the income in the U.S.; in Nigeria, 36%). They then compared the wage one receives in the home country vs. the U.S. Wages in the U.S. are so much higher that they far make up for the higher cost of living.

The researchers found that these working migrating to the U.S. increase their real earnings by 395% or more.

The real wage gap can be mostly explained by higher productivity of the American workforce. How does higher productivity happen? Through three forces: more technological know-how; efficiency of production involving many factors (such as quality of transportation); and the state of education. (From Productivity Differences Between and Within Countries, by Daron Acemoglu and Melissa Dell, 2010.)



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