Occupational Licensing and the Skills Mismatch of Highly Educated Migrants

Max Tani

British Journal of Industrial Relations, 2021, vol. 59, issue 3, 730-756

Abstract: This article studies occupational licensing as a possible cause of education–occupation mismatches of highly educated migrants. Based on data from the Longitudinal Survey of Immigrants to Australia (LSIA), the empirical analysis applies the Propensity Score Matching estimator to identify a suitable control group. Licensing raises hourly wages and reduces over‐education for those working in licensed jobs, and correspondingly it produces worse labour market outcomes for those who do not gain licensure. These results are robust to omitted variable bias and alternative matching approaches. They also persist over time, suggesting that the sole market forces of supply and demand are not enough to reduce the mismatch faced by highly educated migrants after settlement.

Date: 2021
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