where do you come from and where do you go? Assessing skills gaps and labour market outcomes of young adults with different immigration backgrounds

Economic and social integration of migrants and their children is an issue that has gained traction in European policy agendas because of the alleged positive relation between successful integration and labour market performance of migrants. We use differences in skills development between natives and migrants as a proxy for integration. To understand the extent to which the development of cognitive skills of young people with immigrant backgrounds can be explained by the foreign origin of their parents we apply an empirical framework to explain numeracy and literacy skills of migrants for two different cohorts, using PISA and PIAAC data from twelve OECD countries. The framework includes demographic, family background, and school quality variables. We utilize the Oaxaca decomposition to explore how the contributions of family and school factors evolve over time to explain the literacy and numeracy gap among first-generation immigrants, second-generation immigrants and natives. Our results first show some convergence of the skills gap between the second generation immigrants and the natives over time. Second, the gap in literacy skills among the first-generation and natives and among first-generation and second-generation immigrants has increased over time. Our decomposition results show that demographics (gender and language) and family background contribute to the achievement gaps between different groups. We also find that school input variables, such as school autonomy and school accountability factors do contribute skills gaps of young adults with different immigrant backgrounds, in particular to numeracy gaps. Finally, we use the PIAAC dataset to analyze the occupation in Science, Technology, Engineering, or Math (STEM) fields for different nativity groups. Whether or not a young person comes from an immigrant background does not appear to affect the chances of studying in a STEM field or working in a STEM sector.