Effect of undergraduate major and degree level on the earnings of African immigrants in the U.S.

The United States is experiencing a surge in immigration of college-educated Africans. These immigrants are unique in that they are more likely than native-born college graduates to have undergraduate majors in STEM disciplines (science, technology, engineering and mathematics) and are also more likely to have advanced degrees. We use pooled-cross-section data (2011-2015) from the American Community Survey to analyze how this heterogeneity of educational attainment affects the earnings of African immigrant college graduates. First, we compare the undergraduate fields of study of 26,166 African immigrants between 25-65 years of age to the fields of study of native-born college graduates to determine whether these differences are statistically significant. An important finding is that African immigrants are much more likely than native-born college graduates to have undergraduate degrees in STEM disciplines. Second, we examine differences between African immigrants and native college graduates in the degree level attained (i.e., bachelors, masters, professional degree and PhD). We find that African immigrants are more likely to have attained advanced degrees, especially PhDs. Third, we conduct regression analysis of the earnings of native and African immigrant college graduates to determine the effect of area of study and degree level on the earnings of both groups. We conclude that the relatively good earnings performance of African immigrants is the result of unique human capital characteristics such as degree levels, majors, age, English language skills, and the number of years in the United States. We also find that a number of immigrant-specific characteristics, like country of origin, citizenship status, number of years in the United States and English language skills are important determinants of immigrant earnings. Finally, an Oaxaca decomposition analysis of the earnings gap between immigrant and native wages is conducted to learn how the earnings gap is affected by the educational differences between African immigrants and native college graduates.