Do High-Skilled Immigrants find Jobs Faster than Low-Skilled Immigrants?

This paper investigates the role that pre-immigration skills play in immigrants job-finding processes in Germany. We first show theoretically that the job-finding rate for the high-skilled varies depending on their search strategy: if they are prepared to look for both unskilled as well as skilled jobs (cross-skill matching), then their expected time to find a job is lower compared to the low-skilled. However, if the high-skilled are only prepared to look for and take up skilled jobs (ex post segmented matching), it might be that the high-skilled actually need longer to find a job. We then provide empirical evidence by studying the labour-market integration process of Ethnic Germans, one of the largest immigration groups in Germany, using novel German administrative data. Applying proportional hazard models, our estimates generally support the theoretical predictions: in case of cross-skill matching, the job finding rate of the high- and low-skilled does not differ significantly. However, if the length of time a job match holds is accounted for, then we do find that the high-skilled are significantly faster than the low-skilled. If the high-skilled only search for skilled jobs, the likelihood of finding a job is about 50% lower compared to the low-skilled.