Description:
In this paper, I analyze educational outcomes for second generation immigrants and compare them to those of natives. I use a dynamic structural model and focus on transition paths from school to work for youths in Canada and the U.S. Using data extracted from the 1997 National Longitudinal Survey of Youth and the 2000 Youth in Transition Survey, I find that family background is closely related to educational attainment of white children of immigrants in both countries. Moreover, cognitive abilities seem to be more important in determining youths' educational attainment in the U.S. than in Canada. However, I find no evidence suggesting that the effects of key family environment variables on educational attainment differ between children of immigrants and children of natives.Results from counterfactual simulations suggest that incentive-based educational reforms, such as providing educational subsidies to reduce the costs of secondary and post-secondary education, are more effective in increasing overall educational attainment for both groups. In addition, the desired dollar amount of these educational subsidies are smaller in Canada than in the U.S. On the other hand, immigration policies designed to admit only highly educated individuals have modest effects on educational attainment of second generation immigrants. Finally, there is very little difference in educational outcomes between the two groups in Canada and the U.S. despite very different immigration policies, at least for the ethnic group (whites) considered in this paper