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The Wage Premium of Foreign Education: New Evidence from Australia

Gavin Chan, Chris Heaton () and Max Tani
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Gavin Chan: Macquarie University, Sydney

No 6578, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We study whether Australian employers recognise immigrants' education acquired abroad, and if so how. Using data from the Longitudinal Surveys of Immigrants in Australia, we apply interval regression to model migrant hourly earnings. We find substantially higher returns from human capital obtained in Australia and other OECD countries compared with non-OECD countries. These results suggest that the transfer of human capital acquired abroad is mediated by the country in which it was acquired, as found for Israel (Friedberg (2000) and the US (Bratsberg and Ragan (2002)). The results also suggest that immigrants from non-OECD countries are the ones who can gain the most from obtaining further education in Australia, and that targeted rather than generic policies in this area could reduce the extent of the education-occupation mismatch amongst immigrants.

Keywords: education; economic assimilation; immigration (search for similar items in EconPapers)
JEL-codes: C34 J24 J61 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu, nep-lab, nep-lma, nep-ltv and nep-mig
Date: 2012-05
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Published in Australian Economic Review, 2013, 46(4), 395-404

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