Job-Education Mismatch and Its Impact on the Earnings of Immigrants: Evidence from Recent Arrivals to Canada

Abstract

Using the most recent Longitudinal Survey of Immigrants to Canada, this paper measures the incidence of job-education mismatch, particularly over-education, examines its determinants, and estimates its impact on the earnings of immigrants. Job-education mismatch is measured using the realized match method, and the corresponding earnings impact is estimated using an overrequired-under education technique. Determinants of over-education are examined using a bivariate probit model to account for selectivity into employment. Panel data estimation methods are used to estimate earnings equations and the analysis is strati�ed by gender. Results show that recent immigrants to Canada have a persistent high incidence and intensity of over-education with a substantial negative impact on their earnings. In particular, two-thirds of recent immigrants to Canada are over-educated with a wage loss of 8%, while an under-educated immigrant loses around 2% on average. Results also show that pro�ciency in English or French and post-immigration investment in education and training signi�cantly reduce the likelihood of being over-educated. e �ndings of this study could bene�t policies directed to help immigrants integrate in the labour market.

The earnings of immigrants and the quality adjustment of immigrant human capital

“…Similar results are reported by, for example, Galarneau and Morissette (2008), Wald and Fang (2008) and Sharaf (2013) for Canada, Nielsen (2011) for Denmark, Lindley and Lenton (2006) for the U.K, Green et al (2007) and Kler (2007) for Australia.…”

From engineer to taxi driver? Language proficiency and the occupational skills of immigrants

“…Berman et al () and Torres () find a positive interaction with occupational status/quality, and Chiswick and Miller () show that there exist complementarities between language skills and foreign schooling and experience. Sharaf () shows that education–job mismatches are linked to proficiency in the local language. To our knowledge, this current paper is the first to consider the impact of language proficiency on occupational skill transferability.…”

Brain Gain or Brain Waste? Horizontal, Vertical, and Full Job-Education Mismatch and Wage Progression among Skilled Immigrant Men in Canada

“…Our findings highlight the importance of disaggregating the various types of job-education mismatch experienced by immigrants. Most previous studies of immigrants’ job-education mismatch have focused exclusively on overeducation (e.g., Wald and Fang 2008; Chiswick and Miller 2009; Sharaf 2013), which may result in misleading conclusions and policy recommendations. Since full mismatch has the most significant effect on highly skilled immigrants’ economic integration, more research attention on this issue is warranted.…”

“…Previous studies find that immigrants’ rates of mismatch vary with level of education, years since migration, source country, years of foreign work experience, and the type of education, namely, whether vocational or general (Lindley and Lenton 2006; Chiswick and Miller 2009; Dahlstedt 2011). Not only are immigrants more likely to be mismatched than native-born workers, but the wage penalty of job-education mismatch is also greater for immigrants (Lindley and Lenton 2006; Kler 2007; Nielsen 2007; Sanroma, Ramos, and Simon 2008; Wald and Fang 2008; Chiswick and Miller 2009; Sharaf 2013; Joona, Datta Gupta, and Wadensjö 2014).…”