Occupation-skill mismatch and selection of immigrants: Evidence from the Portuguese labor market

This paper aims at investigating how the occupational placement of immigrants relative to their qualifications a ect their self-selection. Using an administrative matched employer-employee data set for Portugal for the years 2002-2009, we first estimate the probability that an average worker from a particular country is overeducated, matched, or undereducated relative to the skill needs of the occupation he takes upon immigration. Second, using these estimated probabilities, we analyze how overeducation and appropriate skill-occupation matches a ect selection of immigrants from 40 origin countries. The results suggest that overeducation leads to negative self-selection of immigrants into the Portuguese labor market. Furthermore, the evidence suggests that appropriate occupation-skill matches a ect migration selection positively. These results imply that receiving countries' selective policies aimed at attracting high skilled immigrants should also focus on reducing occupation-skill mismatch probably through degree recognition and standardization in collaboration with sending countries.