Self-Selection and Earnings Assimilation: Immigrants From the Former Soviet Union in Israel and the United States

Drawing on U.S. decennial census data and on Israeli census and longitudinal data, we compare the educational levels and earnings assimilation of Jewish immigrants from the former Soviet Union (FSU) in the United States and Israel during 1968–2000. Because the doors to both countries were practically open to FSU immigrants between 1968 and 1989, when FSU immigrants were entitled to refugee visas in the United States, the comparison can be viewed as a natural experiment in immigrants' destination choices. The results suggest that FSU immigrants to the United States are of significantly higher educational level and experience significantly faster rates of earnings assimilation in their new destination than their counterparts who immigrated to Israel. We present evidence that patterns of self-selection in immigration to Israel and the United States—on both measured and unmeasured productivity-related traits—is the main reason for these results. When the immigration regulations in the United States changed in 1989, and FSU Jewish immigrants to the United States had to rely on family reunification for obtaining immigrant visas, the adverse effects of the policy change on the type of FSU immigrants coming to the United States were minor and short-lived. As early as 1992, the gaps in the educational levels between FSU immigrants coming to Israel and to the United States returned to their pre-1989 levels, and the differences in earnings assimilation of post-1989 immigrants in the United States and Israel are similar to the differences detected in the 1980s.