Abstract
This paper investigates the occupational placement of immigrants in the US labor market using census data. We find striking differences among highly educated immigrants from different countries, even after we control for individuals' age, experience and level of education. With some exceptions, educated immigrants from Latin American and Eastern European countries are more likely to end up in unskilled jobs than immigrants from Asia and industrial countries. A large part of the variation can be explained by attributes of the country of origin that influence the quality of human capital, such as expenditure on tertiary education and the use of English as a medium of instruction. These findings suggest that “underplaced” migrants suffer primarily from low (or poorly transferable) skills rather than skill underutilization. The selection effects of US immigration policy also play an important role in explaining cross-country variation. The observed under-placement of educated migrants might be alleviated if home and host countries cooperate by sharing information on labor market conditions and work toward the recognition of qualifications.
Highlights
Everyone has a story about how they discovered that their taxi driver was an Eastern European scientist
We calculate the probabilities of obtaining different types of jobs separately for each education level, we report in Chart 2 and column 3 of Table 2 the sum of the probabilities of obtaining science, professional and other skilled jobs for somebody with a professional degree. (We analyze the performance of professional degree holders in more detail in a later section.) We see that the same relative patterns are maintained and that there are large variations across countries of origin even when individuals have identical age, experience and nominal education
In the class of quality variables, we include the natural log of tertiary education expenditure (EDUC_exp) per student during the relevant period adjusted for purchasing power parity, and a dummy variable (ENGLISH) that takes the value of 1 if English is the spoken language in the home country
Summary
Everyone has a story about how they discovered that their taxi driver was an Eastern European scientist. Borjas’ (1987) influential paper points out that income-maximizing behavior on the part of potential migrants can create selection biases which are influenced by the characteristics of the home country income distributions His empirical analysis of the earnings of immigrants from 41 countries using the 1970 and 1980 censuses shows that differences in the U.S earnings of immigrants with the same measured skills were attributable to variations in political and economic conditions (measured by GNP, level of income inequality, and "competitiveness" of political systems) in the home countries at the time of migration. Again she makes no effort to link differences in performance to home country attributes.
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