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The Wage Premium of Foreign Education: New Evidence from Australia

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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 of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp6578
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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.
    2. Philippe Wanner & Marco Pecoraro & Massimiliano Tani, 2021. "Does Educational Mismatch Affect Emigration Behaviour?," European Journal of Population, Springer;European Association for Population Studies, vol. 37(4), pages 959-995, November.
    3. Gil, Pedro Mazeda & Gabriel, Susana & Afonso, Oscar, 2020. "Is the skills mismatch important under skill-biased technological change and imperfect substitutability between immigrants and natives?," Economic Modelling, Elsevier, vol. 84(C), pages 38-54.

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    More about this item

    Keywords

    education; economic assimilation; immigration;
    All these keywords.

    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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