Estimating Self-Selection of Immigrants: Comparing Earnings Differentials Between Natives and Immigrants the US and Israel

Immigrants' economic assimilation host countries is determined by patterns of self-selection on both - observed attributes (mainly human capital) and unobserved attributes of the immigrants from their source countries. the present study immigrants' economic assimilation the United States and Israel are compared. More specifically, the study compares the impact of immigrants' unobserved characteristics on their earnings both countries by applying a model for decomposing difference differentials. It makes use of United States and Israeli decennial census data for comparing self-selection patterns on unobserved attributes of Jewish immigrants from the former Soviet Union (FSU) who arrived the United States and Israel during the 1970s. The results indicate that FSU immigrants who chose the United States have significantly higher levels of unobserved earnings determinants than those who chose Israel. These results are discussed light of migration theories.