GRMF20-01: Continuous Convergence or Cumulative (Dis)advantage? U.S. Immigrants’ Economic Integration in Later Life

Past research documented that immigrants arrive in the U.S. with lower earnings but experience faster earnings growth than do their native-born counterparts, and, as a result, approach earnings parity with the U.S.-born over time. Does achieving economic integration during working years guarantee immigrants’ financial security in later life? Based on cumulative (dis)advantage theories, this study hypothesizes that even as immigrants approach parity with the native-born in terms of current earnings, they accumulate disadvantages in lifetime earnings, job benefits, and wealth that lead them to receive lower income in later life. Drawing on the Health and Retirement Study, the study finds that foreign-born men experience faster income decline than do their U.S.-born counterparts after age 50, and, as a result, have an expanding economic disadvantage relative to the U.S.-born as they age. This expanding disadvantage is observed across cohorts and ethno-racial groups. The study then tests a few explanations for immigrants’ disadvantage, based on the fact that specific mechanisms through which immigrant status shapes later-life income should lead to nativity disparities in specific sources of income (e.g., job benefits would impact income from pensions). It finds lower lifetime earnings and worse job benefits to be the primary drivers of older immigrants’ expanding income disadvantage. Policies that aim at narrowing disparities in aging trajectories may benefit from more consideration of the role of nativity and the long-extending impact of cumulative (dis)advantages.