Training and Occupational Choice of Highly Skilled Immigrants

The transition pattern of post schooling individuals, displaced workers and immigrants to the labor market has similar characteristics. Unemployment falls quickly as workers first find blue-collar jobs, followed by a gradual movement to white-collar occupations. For immigrants the transition includes the learning of the new country language as well as the skills demanded by the new labor market. This paper focuses on male immigrants who moved from the former Soviet Union to Israel and are characterized by their high levels of skills, education and age. We study the impact of participation in training programs, job search, occupational choice and language acquisition of immigrants on their integration to the new labor market. In particular, we formulate a dynamic choice model for employment in blue and white collar occupations and training, where the labor market randomly offered opportunities are affected by the immigrant past choices. The model provides a labor supply pattern that is consistent with the observed choices and enables us to estimate the rate of return for training. Government sponsored training programs are commonly viewed as the best method for subsidizing human capital investment for displaced workers and immigrants. We formulate a model that jointly considers alternative motives for the participation in training programs. In particular, the participation in training affects the wage offers and the job offers probabilities differently in each occupation. Furthermore, the individual may have direct utility from participating in training and we allow for each of these elements to be different for two unobserved types of individuals (Heckman and Singer (1984)). We follow a sample of about 400 men immigrants, who arrived to Israel between 1989-1992, for at most their first 20 quarters (five years) in Israel. The participation in training started at the third quarter, picked at the forth and ended after 3 years in Israel. Only about 30 percent attained any training. Most immigrants left unemployment to blue collar occupations, although about 70 percent of them were working in white-collar jobs before the former USSR. After more than three years the unemployment rate, which was initially about 28%, was stabilized at about 10% (above national average) and the transition to white-collar jobs continued throughout the fifth year after migration.