1. Jorgen Hansen Xingfei Liu Miroslav Kucera Concordia University 1 Educational Attainment of Children of Immigrants: Evidence from Two Cohorts of American Youths

2. Objectives 2 Compare educational attainment and early labour market outcomes of young adults, by immigrant/ethnicity status Formulate a structural model of schooling choices which will enable us to determine the roles of family environment and abilities in the educational decision process Such a model also allows us to identify factors that may affect children of natives and children of immigrants differently given their ethnicity origins Conduct policy reforms/changes using the estimated model Concordia University

3. Model 3 Dynamic programming approach Basic assumptions: Young adults start making schooling decisions after age 16 Two options in each period (school or work) Finite time horizon, individuals retire at age 65 Concordia University

4. Descriptive Statistics 4 Children of Immigrants Concordia University

5. Descriptive Statistics (continued) 5 Children of Natives Concordia University

6. Family backgrounds and AFQT (Marginal) 6 Concordia University

7. Results and Discussion Concordia University 7 Family background matters in shaping youth’s educational attainment; a better family environment implies higher educational attainment; this relationship weakens over the decades (comparing NLSY97 with NLSY79). Family background affects children of natives and children of immigrants differently: i.e. for NLSY97, father’s education is more important for White children of immigrants and Hispanic children of natives, while AFQT scores are more important to Hispanic children of immigrants (both NLSY79 and NLSY97). Second-generation White immigrants rank first in terms of return to education in NLSY97, while second-generation Hispanics rank lowest. Second-generation Whites rank 3 rd in NLSY79, while second-generation Hispanics rank 2 nd in NLSY79.

8. Simulation Hispanic children of immig Concordia University 8

9. Simulation Results Concordia University 9 If higher valuation of education for a specific immigration/ethnic group is defined as obtaining higher average years of schooling as well as having more individuals achieving grades higher than high- school. White children of immigrants from NLSY97 value education more than White children of immigrants from NLSY79. Not much has been changed for Hispanic second-generation immigrants.

10. Simulation Results, cont’d Concordia University 10 Children of immigrants are responsive to subsidies for high school and post-secondary studies Hispanics are more sensitive to policy changes than Whites A subsidy of $6377 per year beyond high school can increase education of Hispanic children of immigrants by 10.4%, and White children of immigrants by 9.3% Improving immigrant parents’ educational backgrounds has a much smaller impact on their educational achievement,2.8% for Hispanics, and 0.3% for Whites.

11. Summary of Results Concordia University 11 Family environment matters in terms of determining educational attainment of children of immigrants. Improvement in these factors are observed in the data for all immigration/ethnic groups through the decades, especially for second-generation White immigrants. Children of immigrants, on average, value education more than native children do, especially for Hispanics. Children of immigrants with Hispanic origins are more responsive to policy changes like subsidies Increasing educational attainment of first generation immigrants appears to have a much tamed effect on improving their children’s educational attainment.