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Local signals and the returns to foreign education

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  • Tani, Massimiliano

Abstract

This paper studies whether assessing foreign education with its host country equivalent, as practised in Australia, raises migrants' returns to schooling. Using unawareness between degrees obtained abroad versus Australia as instrument for undertaking the assessment, I find substantial wage improvements when foreign qualifications are assessed in both cross-sectional and panel estimations. This result is not solely attributable to selection, as this would imply an unrealistic shift in the distribution of unobserved characteristics among assessed and not-assessed migrants. Adding a local signal to foreign education emerges as effective policy to improve the transferability of human capital and migrants' economic assimilation.

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  • Tani, Massimiliano, 2017. "Local signals and the returns to foreign education," Economics of Education Review, Elsevier, vol. 61(C), pages 174-190.
    • Handle: RePEc:eee:ecoedu:v:61:y:2017:i:c:p:174-190
    DOI: 10.1016/j.econedurev.2017.07.006
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    Cited by:

    1. Ludolph, Lars, 2023. "The value of formal host-country education for the labour market position of refugees: Evidence from Austria," Economics of Education Review, Elsevier, vol. 92(C).
    2. Tani, Massimiliano, 2018. "Selective Immigration, Occupational Licensing, and Labour Market Outcomes of Foreign-Trained Migrants," IZA Discussion Papers 11370, Institute of Labor Economics (IZA).
    3. Massimiliano Tani, 2021. "Occupational Licensing and the Skills Mismatch of Highly Educated Migrants," British Journal of Industrial Relations, London School of Economics, vol. 59(3), pages 730-756, September.
    4. Delaney, Judith M. & Devereux, Paul J., 2019. "Understanding gender differences in STEM: Evidence from college applications✰," Economics of Education Review, Elsevier, vol. 72(C), pages 219-238.
    5. Herbert Brücker & Albrecht Glitz & Adrian Lerche & Agnese Romiti, 2021. "Occupational Recognition and Immigrant Labor Market Outcomes," Journal of Labor Economics, University of Chicago Press, vol. 39(2), pages 497-525.
    6. Tani, Massimiliano, 2018. "Selective immigration policies, occupational licensing, and the quality of migrants’ education-occupation match," GLO Discussion Paper Series 206, Global Labor Organization (GLO).
    7. Sally Baker & Stephanie Cousins & Claire Higgins & Massimiliano Tani, 2022. "Refugees are a Valuable but Overlooked Economic Resource, and it is Time to Update Our Approach to Migration," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 55(2), pages 273-280, June.
    8. Massimiliano Tani, 2022. "Same degree but different outcomes: an analysis of labour market outcomes for native and international PhD students in Australia," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 56(1), pages 1-18, December.
    9. Tani, Massimiliano, 2020. "The Labour Market for Native and International PhD Students: Similarities, Differences, and the Role of (University) Employers," IZA Discussion Papers 13536, Institute of Labor Economics (IZA).
    10. Eric Schuss, 2020. "Do Ethnic Networks Ameliorate Education–Occupation Mismatch?," LABOUR, CEIS, vol. 34(4), pages 441-476, December.
    11. Karadja, Mounir & Sundberg, Anton, 2023. "The labor market impact of a taxi driver’s license," Working Paper Series 2023:6, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    12. Ludolph, Lars, 2023. "The value of formal host-country education for the labour market position of refugees: evidence from Austria," LSE Research Online Documents on Economics 117392, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    Immigration; Foreign education; Statistical discrimination;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General

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