Foreign Credential Recognition and Immigrants’ Chances of Being Hired for Skilled Jobs—Evidence from a Survey Experiment Among Employers

Abstract

Abstract A large body of empirical research has demonstrated that foreign education is a major cause of ethnic disadvantages in the labor market. However, there are few insights into how these disadvantages of foreign training can be effectively countered. To improve skilled immigrants’ access to positions commensurate with their foreign qualifications, several countries have introduced policies to officially recognize foreign educational credentials. In this study, we examine the extent to which having recognized foreign credentials improves immigrants’ chances of being hired. To identify the causal effect of foreign credential recognition on immigrants’ chances of accessing adequate jobs, we focus on employers’ hiring decisions. Using vignettes, we simulate a hiring process and show randomized profiles of applicants to employers who then rate how likely they are to invite the applicants to a job interview. Our central finding is that having recognized foreign credentials considerably narrows but does not completely close the gap in the hiring chances between foreign- and native-trained applicants. Moreover, we find that the extent to which applicants benefit from foreign credential recognition varies with their occupational experience but not with the quality of the educational system in which they were trained. We conclude that whereas foreign credential recognition is a promising tool to highlight immigrants’ skill potential and reduce the disadvantages of the foreign-trained in the labor market, it hardly harmonizes the hiring chances of native- and foreign-trained applicants.