Full Citation

Title: The earnings differences between Swedish and Finnish immigrants in the United States in the early 20th century: factors associated with the gap

Citation Type: Dissertation/Thesis

Publication Year: 2021

ISBN:

ISSN:

DOI:

NSFID:

PMCID:

PMID:

Abstract: This thesis studies possible factors associated with the earnings differences between Finnish and Swedish immigrants at the beginning of the 20th century in the United States. Economics literature has provided multiple explanations for the economic assimilation of immigrants. Fundamentally immigrant assimilation in economic theory is seen as a process of country-specific human capital accumulation. Many factors, however, can affect this process. In this thesis, I will test whether the earnings differences between Finnish and Swedish immigrants were associated with their location choices, size of the immigrant communities, English skills and linguistic distance between immigrant’s mother tongue and English. In addition, I test whether even within industries, the earnings differences persist and whether in addition to Swedes, Finns also differ from other Nordic immigrants. To do this, I will use a longitudinal dataset of 28 621 European male immigrants observed in 1900, 1910 and 1920 and use pooled OLS to estimate the earnings differences of Finnish and Swedish immigrants at different stages of their migration period. First, I find that at the time of arrival or at most 5 years after it, Finnish immigrants earn more than otherwise comparable Swedish immigrants. After more than 30 years in the United States, however, Finns earn substantially less than their Swedish counterparts. Also, not only did the Finns diverge from the earnings of the Swedes with the time spent in the United States, but also from their initial level of earnings. I then find that controlling for location choices and the size of the immigrant communities slightly reduce the earnings gap between long-term Finnish and Swedish immigrants. Differences in English skills, on the other hand, are not found to be associated with the earnings differences. Instead, I find that long-term Finnish and Swedish immigrants have almost equal probabilities of knowing English and that Finnish immigrants accumulate language skills at a substantial rate after arrival. The negative earnings gap among long-term Finnish and Swedish immigrants persists even within industries. However, although remaining negative, controlling for industry fixed effects reduces the earnings gap by over 50 %, suggesting that a large fraction of the negative earnings gap was associated with Finnish immigrants being active in low-paying industries. Finally, I find that the similar pattern applies not only to Swedish immigrants but also to other Nordic immigrants. At the time of arrival, Finns seem to earn more than otherwise comparable Nordic immigrants but after more than 30 years in the United States, Finns earn substantially less than their Nordic counterparts.

Url: https://helda.helsinki.fi/bitstream/handle/10138/331256/Rautala_Martta_tutkielma_2021.pdf?sequence=2

User Submitted?: No

Authors: Rautala, Martta

Institution: University of Helsinki

Department: Economics

Advisor:

Degree:

Publisher Location: Helsinki

Pages: 1-80

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Migration and Immigration

Countries: