The Over-Education of UK Immigrants: Evidence from the Labour Force Survey

We investigate the incidence of over-education, as well as the effect on earnings, for immigrants and natives drawn from the Labour Force Survey between 1993 and 2003. This paper investigates whether immigrants are more or less likely to be over and under-educated than are natives and if there is any evidence of economic assimilation in such propensity differences. In addition we examine whether immigrants exhibit a larger or smaller earnings for over-education compared to natives. We find that native born non-whites and immigrants are more likely to be over-educated, even after conditioning on all other socio-economic factors (including ethnicity and English speaking country of origin). However, we also find evidence of assimilation in the incidence of immigrant over-education towards that of natives. Finally, we find that over-education implies a lower return to earnings for immigrants and non-white natives, compared to native born whites. The largest loss in earnings due to over-education actually applies to white education entrants, moreover we find no significant return to over-education for non-white labour market entrants, once we distinguish between these two immigrant groups.