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Overeducated Immigrants in the Canadian Labour Market: Evidence from the Workplace and Employee Survey

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  • Steven Wald
  • Tony Fang

Abstract

This paper addresses the overeducation of recent immigrants in the Canadian labour market. Data from the 1999 Workplace and Employee Survey are used to explore the determinants and earnings consequences of overeducation. Although a well-developed body of literature examines the earnings consequences of overeduca tion, this paper presents the first Canadian estimates of returns to years of schooling that are contingent upon perceived job requirements. Compared with Canadian-born workers, recent immigrants are found to have a relatively high incidence of overeducation and to earn relatively low returns for surplus schooling. These are shown to be major contributors to the earnings gap between recent immigrants and workers born in Canada.

Suggested Citation

  • Steven Wald & Tony Fang, 2008. "Overeducated Immigrants in the Canadian Labour Market: Evidence from the Workplace and Employee Survey," Canadian Public Policy, University of Toronto Press, vol. 34(4), pages 457-480, December.
  • Handle: RePEc:cpp:issued:v:34:y:2008:i:4:p:457-480
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    File URL: http://dx.doi.org/10.3138/cpp.34.4.457
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    References listed on IDEAS

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    1. 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.
    2. Green, Colin & Kler, Parvinder & Leeves, Gareth, 2007. "Immigrant overeducation: Evidence from recent arrivals to Australia," Economics of Education Review, Elsevier, vol. 26(4), pages 420-432, August.
    3. Joseph Schaafsma & Arthur Sweetman, 2001. "Immigrant earnings: age at immigration matters," Canadian Journal of Economics, Canadian Economics Association, vol. 34(4), pages 1066-1099, November.
    4. Séamus McGuinness, 2006. "Overeducation in the Labour Market," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 387-418, July.
    5. 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.
    6. Abdurrahman Aydemir & Mikal Skuterud, 2005. "Explaining the deteriorating entry earnings of Canada's immigrant cohorts, 1966 - 2000," Canadian Journal of Economics, Canadian Economics Association, vol. 38(2), pages 641-672, May.
    7. Christopher Dougherty, 2005. "Why Are the Returns to Schooling Higher for Women than for Men?," Journal of Human Resources, University of Wisconsin Press, vol. 40(4), pages 969-988.
    8. Hersch, Joni, 1991. "Education Match and Job Match," The Review of Economics and Statistics, MIT Press, vol. 73(1), pages 140-144, February.
    9. Sweetman, Arthur, 2004. "Immigrant Source Country Educational Quality and Canadian Labour Market Outcomes," Analytical Studies Branch Research Paper Series 2004234e, Statistics Canada, Analytical Studies Branch.
    10. Ana Ferrer & David A. Green & W. Craig Riddell, 2006. "The Effect of Literacy on Immigrant Earnings," Journal of Human Resources, University of Wisconsin Press, vol. 41(2).
    11. Frenette, Marc, 2004. "The overqualified Canadian graduate: the role of the academic program in the incidence, persistence, and economic returns to overqualification," Economics of Education Review, Elsevier, vol. 23(1), pages 29-45, February.
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    Cited by:

    1. Mesbah Sharaf, 2013. "The earnings of immigrants and the quality adjustment of immigrant human capital," IZA Journal of Migration, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-18, December.
    2. Tani, Massimiliano, 2018. "Selective Immigration, Occupational Licensing, and Labour Market Outcomes of Foreign-Trained Migrants," IZA Discussion Papers 11370, Institute for the Study of Labor (IZA).
    3. repec:eee:ecoedu:v:61:y:2017:i:c:p:174-190 is not listed on IDEAS
    4. Neeraj Kaushal & Yao Lu & Nicole Denier & Julia Shu-Huah Wang & Stephen J. Trejo, 2016. "Immigrant employment and earnings growth in Canada and the USA: evidence from longitudinal data," Journal of Population Economics, Springer;European Society for Population Economics, vol. 29(4), pages 1249-1277, October.
    5. Falcke, Swantje & Meng, Christoph & Nollen, Romy, 2016. "Educational mismatches for second generation migrants. An analysis of applied science graduates in the Netherlands," Research Memorandum 028, Maastricht University, Graduate School of Business and Economics (GSBE).
    6. Pernilla Joona & Nabanita Gupta & Eskil Wadensjö, 2014. "Overeducation among immigrants in Sweden: incidence, wage effects and state dependence," IZA Journal of Migration, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-23, December.
    7. Falcke, Swantje & Meng, Christoph & Nollen, Romy, 2016. "Educational mismatches for second generation migrants. An analysis of applied science graduates in the Netherlands," ROA Research Memorandum 010, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    8. Schwientek, Caroline, 2016. "Are immigrants overeducated in Germany? Determinants and wage effects of educational mismatch," FAU Discussion Papers in Economics 07/2016, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    9. Fang, Tony & Samnani, Al-Karim & Novicevic, Milorad M. & Bing, Mark N., 2013. "Liability-of-foreignness effects on job success of immigrant job seekers," Journal of World Business, Elsevier, vol. 48(1), pages 98-109.
    10. Hayek, Mario & Thomas, Christopher H. & Novicevic, Milorad M. & Montalvo, Daniel, 2016. "Contextualizing human capital theory in a non-Western setting: Testing the pay-for-performance assumption," Journal of Business Research, Elsevier, vol. 69(2), pages 928-935.
    11. Stefano Visintin & Kea Tijdens & Maarten van Klaveren, 2015. "Skill mismatch among migrant workers: evidence from a large multi-country dataset," IZA Journal of Migration, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-34, December.
    12. Tani, Massimiliano, 2017. "Local signals and the returns to foreign education," Economics of Education Review, Elsevier, vol. 61(C), pages 174-190.
    13. Katz, Katarina & Österberg, Torun, 2013. "Wages of childhood immigrants in Sweden – education, returns to education and overeducation," Working Paper Series 2013:8, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    14. Jacques Poot & Steven Stillman, 2016. "Skill composition of immigration flows and the measurement of education-occupation mismatch," IZA Journal of Migration, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-28, December.
    15. Patrick Sabourin & Alain Bélanger, 2015. "Microsimulation of Language Dynamics in a Multilingual Region with High Immigration," International Journal of Microsimulation, International Microsimulation Association, vol. 8(1), pages 67-96.
    16. Julia Beckhusen & Raymond J.G.M. Florax & Jacques Poot & Brigitte S. Waldorf, 2013. "Attracting Global Talent And Then What? Overeducated Immigrants In The United States," Journal of Regional Science, Wiley Blackwell, vol. 53(5), pages 834-854, December.
    17. Dunlavy, A.C. & Garcy, A.M. & Rostila, M., 2016. "Educational mismatch and health status among foreign-born workers in Sweden," Social Science & Medicine, Elsevier, vol. 154(C), pages 36-44.

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