One Australian in five is an immigrant, and almost as many again are the children of immigrants. Most have done well in Australia, but some, particularly Mediterranean immigrants, have not. This paper examines whether this disadvantage reflects differences in education, labour force experience, and English proficiency or whether it is due to discrimination against immigrants. To answer this question we use the best data ever available: the public-use sam ple of the 1981 Census. We estimate a regression model separately for natives, for each of five immigrant groups, and for each of six groups of the second generation. Our model adjusts for education, labour force experience, and language skills. It allows for possible differences between education obtained in Australia and abroad, for differences in labour force experience in Australia and abroad, and for various curvilinear effects. Once differences in endowments are taken into account, we find no evidence of discrimination against immigrants. Further, both immigrants who came to Australia as children and the second generation do as well as longer established Australians, and perhaps better.
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