Multilevel Analysis of Immigrant Wages by Origin-Destination Groups

Yukio Kawano, Johns Hopkins University

Why would someone invest in his community rather than himself? Behind such behavior is social rationality that cannot be explained directly by individual economic rationality. If the chance of individual achievement is contingent upon achievement of one's surrounding community, the person will find communal services socially and economically rational. Therefore, I propose that community conditions significantly influence members' behavior. In this research, I examine how immigrants' wages are influenced by the characteristics of local ethnic groups to which they belong. Taking MSA as a geographic unit, sample of immigrants are drawn from 1990 U.S. PUMS, and analyzed by multilevel random coefficient model (hierarchical linear model). In this model, group characteristics such as clustering, length of residence, educational level, labor and occupational characteristics are used to explain between-group variations in individual-level effects. Hypothetically, individual and group level factors interact in the way in which group stability is maintained.