The Evolution of the Returns to Schooling for Refugees and Other Immigrants in the United States

Abstract

Previous research has shown that refugees have lower earnings than other immigrants with comparable human capital. The differences in the degree of correlation between schooling and unobservable factors across the two groups may contribute to this gap. This paper investigates the returns to schooling for refugee and non-refugee men in the United States. The results show that the returns to schooling are lower for refugees upon arrival. This gap persists over two decades in the country and is robust to specifications that conduct sensitivity analysis, suggesting that differences in unobservable characteristics that are important in immigrants’ labor market success, particularly adaptability traits, drive the initial gap in the returns to schooling and how the gap changes over time.