Ruhr Economic Papers

Ruhr Economic Papers #669

Individualism vs. Collectivism: How Inherited Cultural Values Affect Labor Market Outcomes of Second Generation Immigrants in the US

by Lisa Sofie Höckel

RWI, 01/2017, 43 S./p., 8 Euro, ISBN 978-3-86788-776-2 DOI: 10.4419/86788776

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Abstract

The labor market performance of second generation immigrants is a crucial determinant of integration. Labor market returns to their different cultural traits, however, have been rarely researched within the economic literature. This study provides insight on the link between the level of collectivism at the country of ancestry and labor market outcome of second generation immigrants in the US. Using 1994 - 2014 survey data, we analyze the relationship between inherited cultural values and the economic outcome of more than 21,000 male homogamous second generation immigrants. We use the historical disease environment of the country of ancestry as a measurement for collectivism since collectivistic values have been particularly advantageous in countries with a greater prevalence of disease-causing pathogens. We find that higher scores of collectivism are associated with higher labor force participation and income earned in the US. The number of hours worked and self-selection into jobs that require collectivistic traits are the main determinants of the positive impact of collectivism on earnings.

JEL-Classification: A13, F22, J14, J24

Keywords: Labor force participation; occupational choice; migration; cultural values

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