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An Explanation for the Lower Payoff to Schooling for Immigrants in the Canadian Labour Market

  • Chiswick, Barry R.

    ()

    (George Washington University)

  • Miller, Paul W.

    (Curtin University)

This paper examines the difference between the payoffs to schooling for immigrants and the native born in Canada, using 2001 Census data. Analyses are presented for males and females. Comparisons are offered with findings for the US. The paper uses the Overeducation/Required education/Undereducation framework (Hartog, 2000) and a decomposition developed by Chiswick and Miller (2008). This decomposition links overeducation to the less-than-perfect international transferability of immigrants' human capital, and under-education to favourable selection in immigration. The results show that immigrants have a lower payoff to schooling because of the different effects under-education and over-education have on their earnings. The effects of under-education, or selection in immigration, are, however, twice as large as the effects of over-education, or limited international transferability of human capital. Favourable selection in immigration appears to be less important in Canada than in the US, where it predominates among the least educated.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4448.

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Length: 43 pages
Date of creation: Sep 2009
Date of revision:
Publication status: published in: Ted McDonald et al. (eds.): Canadian Immigration - Economic Evidence for a Dynamic Policy Environment, McGill-Queen's University Press, Montreal and Kingston, 2010, 41-75
Handle: RePEc:iza:izadps:dp4448
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  1. Chiswick, Barry R., 2000. "Are Immigrants Favorably Self-Selected? An Economic Analysis," IZA Discussion Papers 131, Institute for the Study of Labor (IZA).
  2. Chiswick, Barry R. & Miller, Paul W., 2009. "Does the Choice of Reference Levels of Education Matter in the ORU Earnings Equation?," IZA Discussion Papers 4382, Institute for the Study of Labor (IZA).
  3. Friedberg, Rachel M, 2000. "You Can't Take It with You? Immigrant Assimilation and the Portability of Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 221-51, April.
  4. Baker, Michael & Benjamin, Dwayne, 1994. "The Performance of Immigrants in the Canadian Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 12(3), pages 369-405, July.
  5. Heather Antecol & Deborah A. Cobb-Clark & Stephen J. Trejo, 2003. "Immigration Policy and the Skills of Immigrants to Australia, Canada, and the United States," Journal of Human Resources, University of Wisconsin Press, vol. 38(1).
  6. Paul W. Miller & Barry R. Chiswick, 2006. "Why is the Payoff to Schooling Smaller for Immigrants?," Economics Discussion / Working Papers 06-03, The University of Western Australia, Department of Economics.
  7. Barry Chiswick, 1999. "Are Immigrants Favorably Self-Selected?," American Economic Review, American Economic Association, vol. 89(2), pages 181-185, May.
  8. 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.
  9. 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.
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