Abstract
Abstract Literature on the immigrant labour market mismatch has not explored the signal provided by the quality of home country work experience, particularly that of education-occupation mismatch prior to migration. We show that type of work experience in the home country plays a significant role in explaining immigrant mismatch in the destination country’s labour market. We use the Longitudinal Survey of Immigrants to Australia and find that having been over-educated in the last job held in the home country increases the likelihood of being over-educated in Australia by about 45 percent. Whereas having been under-educated in the home country has an even stronger impact, as it increases the probability to be similarly mismatched in Australia by 62 percent.
Highlights
Most of the existing literature in labour economics has argued that education is the key signal employers’ use in determining the level of ability/productivity about those they are likely to employ
Empirical methods The primary concern of this paper is to model the determinants of a mismatch between the actual education and the one formally required for the occupation among immigrants in the Australian labour market
Taking into account the level of professional experience achieved before migration, along with the formal education qualifications, provides a more accurate estimate of the immigrants’ real productivity, especially since the education signal attenuates with work experience
Summary
Most of the existing literature in labour economics has argued that education is the key signal employers’ use in determining the level of ability/productivity about those they are likely to employ. Belman and Heywood (1997) has shown that “the returns to education signals will attenuate with workforce experience” as the skills used and/or developed in previous jobs become more important in determining the real productivity level of potential employees 1. Skills gained through professional experience might be from jobs that do not match the individual’s education level and, might affect future job prospects in a diverging way. Having accumulated experience and skills below the education level may result in a lower probability of getting job offers that match the formal educational qualifications. Having advanced in a previous job to a position involving more knowledge and skills than the ones matching formal education may result in getting subsequent offers for jobs that require a relatively higher education level as well 2
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