Returns to pre-immigration education for non-western immigrants: why so low?
Ines Hardoy and
Authors registered in the RePEc Author Service: Pål Schøne ()
Education Economics, 2014, vol. 22, issue 1, 48-72
The main purpose of this paper is to analyse the return to pre-immigration education for non-western immigrants, and explain why it is so low. Returns to one extra year of education is three times higher for ethnic Norwegians than for non-western immigrants. Using the method 'Over-Required-Under' (ORU) education approach, we reveal that this is because non-western immigrants have lower returns to overeducation and required education, and they also have lower penalties associated with undereducation. These factors together explain more than 60% all of the difference in returns to education between native born and non-western immigrants. Based on different results in this paper, we argue that both quality of education from the country of birth and lack of transferable skills may be important components.
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