Intergenerational Mobility and the Earnings Position of First-, Second-, and Third-Generation Immigrants

Immigrants' labour market situation has been in the focus of research in economics as well as in other sciences, and the labour market situation of immigrants and their children (i.e. first- and second-generation immigrants) is relatively well documented in many countries today. However, less attention has up to now been paid to the labour market and earnings situation among the grandchildren of immigrants, i.e. third-generation immigrants. Against this background, this paper studies intergenerational earnings mobility and the earnings position of three generations of immigrants in Sweden. The results indicate a regression towards the native earnings mean in immigrant earnings across the first two generations in the sense that immigrants earn more than natives in the first generation while there are small ethnic earnings in the second generation. Furthermore, immigrants earn less than natives in the third generation. Thus, the results suggest a downward trend in immigrants' relative earnings across generations. One conclusion of the study is that ethnic differences in earnings may occur beyond the second generation of immigrants and that the problem with integration of immigrants therefore may last for several generations.