IDEAS home Printed from https://ideas.repec.org/a/eee/labeco/v15y2008i6p1317-1340.html
   My bibliography  Save this article

Why is the payoff to schooling smaller for immigrants?

Author

Listed:
  • Chiswick, Barry R.
  • Miller, Paul W.

Abstract

To answer the question, this paper uses the Over-Required-Under Education technique, a new decomposition methodology and data on adult men from the 2000 US Census. Using the 510 three-digit occupational categories, similar patterns emerge whether the mean or mode of education in the occupation is used as the typical (required) level. The partial effect of the occupation's typical schooling level is the same for immigrants and natives. About two thirds of the smaller effect of schooling on earnings is attributable to differences by nativity in the payoffs to over/under education. The remainder is largely due to the different distributions by nativity of over/under education. Favorable immigrant selectivity, especially among the least skilled, and to a lesser extent, limited transferability of foreign schooling, is largely responsible for these patterns. A variety of tests of robustness are performed, including separate analyses for child and adult immigrants.

Suggested Citation

  • Chiswick, Barry R. & Miller, Paul W., 2008. "Why is the payoff to schooling smaller for immigrants?," Labour Economics, Elsevier, vol. 15(6), pages 1317-1340, December.
    • Handle: RePEc:eee:labeco:v:15:y:2008:i:6:p:1317-1340
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0927-5371(08)00002-X
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Barry R. Chiswick, 2006. "Jacob Mincer, Experience and the Distribution of Earnings," Springer Books, in: Shoshana Grossbard (ed.), Jacob Mincer A Pioneer of Modern Labor Economics, chapter 10, pages 109-126, Springer.
    2. 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.
    3. Séamus McGuinness, 2006. "Overeducation in the Labour Market," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 387-418, July.
    4. Kiker, B. F. & Santos, Maria C. & de Oliveira, M. Mendes, 1997. "Overeducation and undereducation: Evidence for Portugal," Economics of Education Review, Elsevier, vol. 16(2), pages 111-125, April.
    5. Richard R. Verdugo & Naomi Turner Verdugo, 1989. "The Impact of Surplus Schooling on Earnings: Some Additional Findings," Journal of Human Resources, University of Wisconsin Press, vol. 24(4), pages 629-643.
    6. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
    7. William Fellner, 1979. "Contemporary Economic Problems, 1979," Books, American Enterprise Institute, number 918293, September.
    8. Richard Fry & B. Lindsay Lowell, 2003. "The Value of Bilingualism in the U.S. Labor Market," ILR Review, Cornell University, ILR School, vol. 57(1), pages 128-140, October.
    9. Kalena E. Cortes, 2004. "Are Refugees Different from Economic Immigrants? Some Empirical Evidence on the Heterogeneity of Immigrant Groups in the United States," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 465-480, May.
    10. 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 221-251, April.
    11. Guillermina Jasso & Mark Rosensweig & James P. Smith, 2003. "The Earnings of US immigrants," Labor and Demography 0312007, University Library of Munich, Germany.
    12. repec:bla:ecorec:v:61:y:1985:i:173:p:540-53 is not listed on IDEAS
    13. 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.
    14. Cohn, Elchanan & Khan, Shahina P., 1995. "The wage effects of overschooling revisited," Labour Economics, Elsevier, vol. 2(1), pages 67-76, March.
    15. Michael Shields & Stephen Wheatley Price, 1998. "The earnings of male immigrants in England: evidence from the quarterly LFS," Applied Economics, Taylor & Francis Journals, vol. 30(9), pages 1157-1168.
    16. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
    17. Rumberger, Russell W., 1981. "The rising incidence of overeducation in the U.S. Labor market," Economics of Education Review, Elsevier, vol. 1(3), pages 293-314, June.
    18. repec:bla:econom:v:47:y:1980:i:185:p:81-87 is not listed on IDEAS
    19. Barry R. Chiswick & Yew Liang Lee & Paul W. Miller, 2002. "Longitudinal Analysis of Immigrant Occupational Mobility: A Test of the Immigrant Assimilation Hypothesis," Economics Discussion / Working Papers 02-08, The University of Western Australia, Department of Economics.
    20. Cortes, Kalena E., 2004. "Are Refugees Different from Economic Immigrants? Some Empirical Evidence on the Heterogeneity of Immigrant Groups in the United States," IZA Discussion Papers 1063, Institute of Labor Economics (IZA).
    21. Barry Chiswick, 1999. "Are Immigrants Favorably Self-Selected?," American Economic Review, American Economic Association, vol. 89(2), pages 181-185, May.
    22. Duncan, Greg J. & Hoffman, Saul D., 1981. "The incidence and wage effects of overeducation," Economics of Education Review, Elsevier, vol. 1(1), pages 75-86, February.
    23. 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.
    24. John J. Beggs & Bruce J. Chapman, 1988. "Immigrant Wage Adjustment in Australia: Cross Section and Time‐Series Estimates," The Economic Record, The Economic Society of Australia, vol. 64(3), pages 161-167, September.
    25. repec:bla:ecorec:v:64:y:1988:i:186:p:161-67 is not listed on IDEAS
    26. Dustmann, C, 1993. "Earnings Adjustment of Temporary Migrants," Journal of Population Economics, Springer;European Society for Population Economics, vol. 6(2), pages 153-168, May.
    27. Chiswick, Barry R. & Miller, Paul W., 2007. "The International Transferability of Immigrants’ Human Capital Skills," IZA Discussion Papers 2670, Institute of Labor Economics (IZA).
    28. Daly, Mary C. & Buchel, Felix & Duncan, Greg J., 2000. "Premiums and penalties for surplus and deficit education: Evidence from the United States and Germany," Economics of Education Review, Elsevier, vol. 19(2), pages 169-178, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lubomira Anastassova, 2010. "Are Immigrants Paid Less for Education?," LIS Working papers 535, LIS Cross-National Data Center in Luxembourg.
    2. Chiswick, Barry R. & Miller, Paul W., 2007. "The International Transferability of Immigrants’ Human Capital Skills," IZA Discussion Papers 2670, Institute of Labor Economics (IZA).
    3. Jason Dean, 2018. "Does it matter if immigrants work in jobs related to their education?," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 8(1), pages 1-42, December.
    4. Julia Beckhusen & Raymond J.G.M. Florax & Jacques Poot & Brigitte S. Waldorf, 2013. "Attracting Global Talent And Then What? Overeducated Immigrants In The United States," Journal of Regional Science, Wiley Blackwell, vol. 53(5), pages 834-854, December.
    5. Murillo, Inés P. & Rahona-López, Marta & Salinas-Jiménez, Maria del Mar, 2012. "Effects of educational mismatch on private returns to education: An analysis of the Spanish case (1995–2006)," Journal of Policy Modeling, Elsevier, vol. 34(5), pages 646-659.
    6. Valentine Jacobs & Kevin Pineda-Hernández & François Rycx & Mélanie Volral, 2023. "Does over-education raise productivity and wages equally? The moderating role of workers’ origin and immigrants’ background," Education Economics, Taylor & Francis Journals, vol. 31(6), pages 698-724, November.
    7. Dustmann, Christian & Glitz, Albrecht, 2011. "Migration and Education," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 4, chapter 0, pages 327-439, Elsevier.
    8. Nieto, Sandra & Matano, Alessia & Ramos, Raul, 2013. "Skill Mismatches in the EU: Immigrants vs. Natives," IZA Discussion Papers 7701, Institute of Labor Economics (IZA).
    9. repec:kap:iaecre:v:11:y:2005:i:1:p:93-109 is not listed on IDEAS
    10. Lourdes Badillo-Amador & Antonio García-Sánchez & Luis Vila, 2005. "Mismatches in the Spanish Labor Market: Education vs. Competence Match," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 11(1), pages 93-109, February.
    11. Shujaat Farooq, 2015. "Job Mismatches in Pakistan: Is there Some Wage Penalty to Graduates?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 54(2), pages 147-164.
    12. Chiswick, Barry R. & Miller, Paul W., 2009. "ORU Analyses of Immigrant Earnings in Australia, with International Comparisons," IZA Discussion Papers 4422, Institute of Labor Economics (IZA).
    13. Shweta Bahl & Ajay Sharma, 2021. "Education–Occupation Mismatch and Dispersion in Returns to Education: Evidence from India," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 153(1), pages 251-298, January.
    14. Sandra Nieto & Raúl Ramos, 2013. "Non-Formal Education, Overeducation And Wages," Revista de Economia Aplicada, Universidad de Zaragoza, Departamento de Estructura Economica y Economia Publica, vol. 21(1), pages 5-28, Spring.
    15. Altorjai, Szilvia, 2013. "Over-qualification of immigrants in the UK," ISER Working Paper Series 2013-11, Institute for Social and Economic Research.
    16. L. Cattani & G. Guidetti & G. Pedrini, 2014. "Assessing the incidence and wage effects of overeducation among Italian graduates using a new measure for educational requirements," Working Papers wp939, Dipartimento Scienze Economiche, Universita' di Bologna.
    17. Matloob Piracha & Florin Vadean, 2013. "Migrant educational mismatch and the labor market," Chapters, in: Amelie F. Constant & Klaus F. Zimmermann (ed.), International Handbook on the Economics of Migration, chapter 9, pages 176-192, Edward Elgar Publishing.
    18. V. Jacobs & F. Rycx & M. Volral, 2022. "Wage Effects of Educational Mismatch According to Workers’ Origin: The Role of Demographics and Firm Characteristics," De Economist, Springer, vol. 170(4), pages 459-501, November.
    19. Esteve Sanromá & Raúl Ramos & Hipólito Simón, 2015. "Portability of Human Capital and Immigrant Overeducation in Spain," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 34(2), pages 223-241, April.
    20. Morsy, Hanan & Mukasa, Adamon, 2019. "Youth Jobs, Skill and Educational Mismatches in Africa," MPRA Paper 100394, University Library of Munich, Germany.
    21. Lubomira Anastassova, 2010. "Are Immigrants Paid Less for Education?," CERGE-EI Working Papers wp406, The Center for Economic Research and Graduate Education - Economics Institute, Prague.

    More about this item

    Keywords

    I21 J24 J31 J61 F22 Immigrants Schooling Occupations Earnings Rates of return Selectivity;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:labeco:v:15:y:2008:i:6:p:1317-1340. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/labeco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.