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Why is the payoff to schooling smaller for immigrants?

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Author Info
Chiswick, Barry R.
Miller, Paul W.

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Abstract

To answer the question, this paper uses the Over-Required-Under Education technique, a new decomposition methodology and data on adult men from the 2000 US Census. Using the 510 three-digit occupational categories, similar patterns emerge whether the mean or mode of education in the occupation is used as the typical (required) level. The partial effect of the occupation's typical schooling level is the same for immigrants and natives. About two thirds of the smaller effect of schooling on earnings is attributable to differences by nativity in the payoffs to over/under education. The remainder is largely due to the different distributions by nativity of over/under education. Favorable immigrant selectivity, especially among the least skilled, and to a lesser extent, limited transferability of foreign schooling, is largely responsible for these patterns. A variety of tests of robustness are performed, including separate analyses for child and adult immigrants.

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File URL: http://www.sciencedirect.com/science/article/B6VFD-4RJK11H-1/2/d3e4ccab52846ba29fcd81ddb8d981f7
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Publisher Info
Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 15 (2008)
Issue (Month): 6 (December)
Pages: 1317-1340
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Handle: RePEc:eee:labeco:v:15:y:2008:i:6:p:1317-1340

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Related research
Keywords: I21 J24 J31 J61 F22 Immigrants Schooling Occupations Earnings Rates of return Selectivity;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Barry R. Chiswick & Paul W. Miller, 2007. "The International Transferability of Immigrants’ Human Capital Skills," IZA Discussion Papers 2670, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Daly, Mary C. & Buchel, Felix & Duncan, Greg J., 2000. "Premiums and penalties for surplus and deficit education: Evidence from the United States and Germany," Economics of Education Review, Elsevier, vol. 19(2), pages 169-178, April. [Downloadable!] (restricted)
  3. Guillermina Jasso & Mark Rosensweig & James P. Smith, 2003. "The Earnings of US immigrants," Labor and Demography 0312007, EconWPA. [Downloadable!]
  4. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October. [Downloadable!] (restricted)
  5. Chiswick, Barry R & Miller, Paul W, 1985. "Immigrant Generation and Income in Australia," The Economic Record, The Economic Society of Australia, vol. 61(173), pages 540-53, June.
  6. Barry R. Chiswick & Yew Liang Lee & Paul W. Miller, 2002. "Longitudinal Analysis of Immigrant Occupational Mobility: A Test of the Immigrant Assimilation Hypothesis," Economics Discussion / Working Papers 02-08, The University of Western Australia, Department of Economics. [Downloadable!]
    Other versions:
  7. Beggs, John J & Chapman, Bruce J, 1988. "Immigrant Wage Adjustment in Australia: Cross Section and Time-Series Estimates," The Economic Record, The Economic Society of Australia, vol. 64(186), pages 161-67, September.
  8. Hartog, Joop, 2000. "Over-education and earnings: where are we, where should we go?," Economics of Education Review, Elsevier, vol. 19(2), pages 131-147, April. [Downloadable!] (restricted)
  9. Dustmann, C, 1993. "Earnings Adjustment of Temporary Migrants," Journal of Population Economics, Springer, vol. 6(2), pages 153-68, May.
  10. Kalena E. Cortes, 2004. "Are Refugees Different from Economic Immigrants? Some Empirical Evidence on the Heterogeneity of Immigrant Groups in the United States," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 465-480, 06. [Downloadable!] (restricted)
  11. Rumberger, Russell W., 1981. "The rising incidence of overeducation in the U.S. Labor market," Economics of Education Review, Elsevier, vol. 1(3), pages 293-314, June. [Downloadable!] (restricted)
  12. Chiswick, Barry R, 1980. "The Earnings of White and Coloured Male Immigrants in Britain," Economica, London School of Economics and Political Science, vol. 47(185), pages 81-87, February. [Downloadable!] (restricted)
  13. Cortes, Kalena E., 2004. "Are Refugees Different from Economic Immigrants? Some Empirical Evidence on the Heterogeneity of Immigrant Groups in the United States," IZA Discussion Papers 1063, Institute for the Study of Labor (IZA). [Downloadable!]
  14. Cohn, Elchanan & Khan, Shahina P., 1995. "The wage effects of overschooling revisited," Labour Economics, Elsevier, vol. 2(1), pages 67-76, March. [Downloadable!] (restricted)
  15. Shields, Michael A & Price, Stephen Wheatley, 1998. "The Earnings of Male Immigrants in England: Evidence from the Quarterly LFS," Applied Economics, Taylor and Francis Journals, vol. 30(9), pages 1157-68, September. [Downloadable!] (restricted)
  16. Kiker, B. F. & Santos, Maria C. & de Oliveira, M. Mendes, 1997. "Overeducation and undereducation: Evidence for Portugal," Economics of Education Review, Elsevier, vol. 16(2), pages 111-125, April. [Downloadable!] (restricted)
  17. Barry Chiswick, 1999. "Are Immigrants Favorably Self-Selected?," American Economic Review, American Economic Association, vol. 89(2), pages 181-185, May. [Downloadable!] (restricted)
  18. Richard Fry & B. Lindsay Lowell, 2003. "The value of bilingualism in the U.S. labor market," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 57(1), pages 128-141, October. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Chiswick, Barry R. & Miller, Paul W., 2009. "Educational Mismatch: Are High-Skilled Immigrants Really Working at High-Skilled Jobs and the Price They Pay If They Aren't?," IZA Discussion Papers 4280, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Nicole Schneeweis, 2006. "How should we organize schooling to further children with migration background?," Economics working papers 2006-20, Department of Economics, Johannes Kepler University Linz, Austria. [Downloadable!]
  3. Barry R. Chiswick & Jidong Huang, 2006. "The Earnings of American Jewish Men: Human Capital, Denomination and Religiosity," IZA Discussion Papers 2301, Institute for the Study of Labor (IZA). [Downloadable!]
  4. Sanromá, Esteve & Ramos, Raul & Simón, Hipólito, 2008. "The Portability of Human Capital and Immigrant Assimilation: Evidence for Spain," IZA Discussion Papers 3649, Institute for the Study of Labor (IZA). [Downloadable!]
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