A Panel Study of Immigrants' Overeducation and Earnings in Australia

Le Wen () and Sholeh Maani ()
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Le Wen: University of Auckland

No 11216, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The recent literature on overeducation has provided divergent results on whether or not overeducation bears an earnings penalty. In addition, few studies have considered overeducation among immigrants. This paper uses panel data analyses to investigate the match between education and occupation and resulting earnings effects for immigrants from English Speaking, and Non-English Speaking, Backgrounds relative to the native-born population in Australia. Based on nine years of longitudinal data, the panel approach addresses individual heterogeneity effects (motivation, ability, and compensating differentials) that are crucial in overeducation analysis. First, we find that immigrants have significantly higher incidence rates of overeducation than the native-born. This probability increases, rather than diminishes, once we control for unobserved correlated effects. Second, based on panel fixed effects analyses there is no penalty for overeducation for ESB immigrants. However, NESB immigrants receive a lower return to required and overeducation compared to the other groups after controlling for individual heterogeneity.

Keywords: panel data; non-English-speaking; immigrants; educational mismatch; over-education; wage effects (search for similar items in EconPapers)
JEL-codes: J15 J24 J31 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2017-12
New Economics Papers: this item is included in nep-edu, nep-lab and nep-mig
References: View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published - published in: International Migration, 2018, 56 (2), 177-200

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