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The effect of economic change on the Latino to non-Latino White earnings gap has been well documented; however much of this research has focused on Latinos as a general category with little focus on subgroup variations. Despite varied histories and demographic characteristics Mexicans, Puerto Ricans and Cubans, the largest Hispanic subgroups, have usually been combined in analyses of earnings gaps. Consequently, we know little about differential effects of the “new economy” on earnings by subgroup across labor markets. Using a sample consisting of Mexicans, Cubans, Puerto Ricans, and non-Hispanic Whites residing in 106 metropolitan statistical areas (MSA) from the 2000 1-percent I-PUMS, we examine the influence of human capital, deindustrialization, immigration, and “new economy” measures on Latino/a earnings gaps. Multi-level model analyses reveal that Latino subgroups have differently sized earnings gaps, that human capital and demographic characteristics reduce the gaps by more than seventy percent, that the gaps vary independently across MSAs and that the effects of labor market characteristics on these gaps vary by subgroup. New economy characteristics are most important for non-Hispanic White males, thereby indirectly modifying gender-ethnicity gaps. These findings highlight the importance of gender/ethnicity- specific earnings analyses.

The effect of economic change on the Latino to non-Latino White earnings gap has been well documented; however much of this research has focused on Latinos as a general category with little focus on subgroup variations. Despite varied histories and demographic characteristics Mexicans, Puerto Ricans and Cubans, the largest Hispanic subgroups, have usually been combined in analyses of earnings gaps. Consequently, we know little about differential effects of the “new economy” on earnings by subgroup across labor markets. Using a sample consisting of Mexicans, Cubans, Puerto Ricans, and non-Hispanic Whites residing in 106 metropolitan statistical areas (MSA) from the 2000 1-percent I-PUMS, we examine the influence of human capital, deindustrialization, immigration, and “new economy” measures on Latino/a earnings gaps. Multi-level model analyses reveal that Latino subgroups have differently sized earnings gaps, that human capital and demographic characteristics reduce the gaps by more than seventy percent, that the gaps vary independently across MSAs and that the effects of labor market characteristics on these gaps vary by subgroup. New economy characteristics are most important for non-Hispanic White males, thereby indirectly modifying gender-ethnicity gaps. These findings highlight the importance of gender/ethnicity- specific earnings analyses.