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The Wage Premium of Foreign Education: New Evidence from Australia

Author

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  • Chan, Gavin

    (Macquarie University, Sydney)

  • Heaton, Christopher

    () (Macquarie University, Sydney)

  • Tani, Massimiliano

    () (University of New South Wales)

Abstract

We study whether Australian employers recognise immigrants' education acquired abroad, and if so how. Using data from the Longitudinal Surveys of Immigrants in Australia, we apply interval regression to model migrant hourly earnings. We find substantially higher returns from human capital obtained in Australia and other OECD countries compared with non-OECD countries. These results suggest that the transfer of human capital acquired abroad is mediated by the country in which it was acquired, as found for Israel (Friedberg (2000) and the US (Bratsberg and Ragan (2002)). The results also suggest that immigrants from non-OECD countries are the ones who can gain the most from obtaining further education in Australia, and that targeted rather than generic policies in this area could reduce the extent of the education-occupation mismatch amongst immigrants.

Suggested Citation

  • Chan, Gavin & Heaton, Christopher & Tani, Massimiliano, 2012. "The Wage Premium of Foreign Education: New Evidence from Australia," IZA Discussion Papers 6578, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp6578
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    References listed on IDEAS

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    Cited by:

    1. Koshy, Paul & Seymour, Richard & Dockery, Mike, 2016. "Are there institutional differences in the earnings of Australian higher education graduates?," Economic Analysis and Policy, Elsevier, vol. 51(C), pages 1-11.

    More about this item

    Keywords

    education; economic assimilation; immigration;

    JEL classification:

    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
    • 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

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