MIGRANTS’ QUALIFICATIONS AND SKILLS AND THEIR LINKS WITH LABOUR MARKET OUTCOMES

Sara Bonfati

Ana Damas de Matos Thomas Liebig

Theodora Xenogiani International Migration Division

Directorate for Employment, Labour and Social Affairs OECD

EU-OECD Dialogue on migration and mobility

Brussels, 24 February 2014

• Virtually all EU and OECD countries favour highly-qualified immigration.

• In 2011, on average about 30% of the foreign-born in the OECD had tertiary education and the share of the highly-qualified has been growing over the past decade.

• Evidence that immigrants find their qualifications less valued in the labour market than the native-born. Why is this the case? – Language problems? – Do employers have difficulties in judging foreign qualifications? – Is the «value» of immigrants’ qualifications – measured in terms of skills –

lower?

Introduction

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I. The qualifications of immigrants

II. The value of immigrant qualifications in the labour market

III. From qualifications to skills: the PIAAC survey

Outline

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• 70% of immigrants in both Europe and the U.S. have foreign qualifications

• In Europe, 40% of the foreign-born have qualifications from a non-EU country

• For those with tertiary education, broad fields of study are remarkably similar both among the four immigrant groups – EU vs. non-EU, foreign vs. host-country education – and compared with the native-born

• Data – 2009/2010 European Labour Force Survey for the 27 EU countries plus Norway and

Switzerland – 2009/2010 Current Population Survey for the United States – 2008 Ad-hoc module on immigrants in the European Labour Force Survey

Host-country vs. foreign qualifications

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Immigrants are on average less educated than the native-born, but the differences are driven by those with foreign qualifications…

5 …and larger in the United States than in Europe

-3

-2.5

-2

-1.5

-1

-0.5

0

0.5

1

1.5

Host-countryeducation

Foreign Education All Foreign-born

Europe United States

Years of education for immigrants compared with the native-born

Education of the foreign-born with foreign education has increased over time in both regions

6

-4

-3.5

-3

-2.5

-2

-1.5

-1

-0.5

0ysm1-5 ysm6-10 ysm11-15 ysm16-20 ysm20+

EU27 immigrants

non-EU27 immigrants

all immigrants - EU

all immigrants - US

Years of education for immigrants with foreign qualifications compared with the native-born, by years of residence (ysm)

In Europe, the returns to foreign qualifications in terms of employment are lower than those to host-country education…

7

-0.1

0

0.1

0.2

0.3

0.4

ISCED 0-1 ISCED 2 ISCED 3-4 ISCED 5 ISCED 6

Employment rate by education level in Europe

Native-born Host-country Education Foreign Education

...and those to non-EU qualifications are lower than those to EU qualifications at all levels of education

The picture is broadly similar in the U.S. – but fewer differences between immigrants with host-country and foreign education

8

0

0.1

0.2

0.3

0.4

0.5

0.6

ISCED 0-1 ISCED 2 ISCED 3-4 ISCED 5 ISCED 6

Native-born Host-country Education Foreign Education

In Europe, the incidence of over-qualification among the employed tertiary-educated is much higher among immigrants

9

-5

0

5

10

15

20

25

Europe United States

All foreign-born with host-country education with foreign education with EU education with non-EU education

Overqualification rates for tertiary-educated immigrants compared with native-born; by origin of qualifications

• An important factor for policy: only labour migrants are

directly selected – but category of migration is rarely considered in analyses of migrants’ outcomes.

• Migrants who came for work or study have higher

qualification levels than family or humanitarian migrants, but still lower than the native-born.

• The returns to qualifications are higher for labour migrants (and for study migrants) than for the other two groups but still tend to be lower than for the native-born.

Category of migration: the single most important determinant of outcomes

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• The foreign-born who lack host-country language proficiency

are a group with cumulative disadvantages (lower education levels, more likely to have foreign education and to be humanitarian migrants, etc.).

• But even after accounting for these, they face a 14%-point lower employment rate than other immigrants…

…and an over-qualification rate that is on average 17%-points higher.

• For labour migrants without language problems, one observes no longer a higher incidence of overqualification.

Host-country language proficiency is an important determinant of outcomes

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• 25% of the foreign-born with tertiary education have applied

for recognition

• Two groups of migrants are most likely to apply: – Migrants who pursue further studies in the host country – Migrants with qualifications in the health sector

• The foreign-born who have their foreign qualifications formally

recognised have a 10 %-point lower over-qualification rate, accounting for the origin of the qualifications, the category of migration and the field of study.

Recognition of foreign qualifications is associated with better outcomes

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Detailed labour market

outcomes

Migrant characteristics: country of birth, year of arrival,

foreign qualification,

languages spoken

Personal characteristics:

age, gender, highest

qualification, years of schooling

Literacy, numeracy

proficiency/ problem

solving

Training, skills used

at work, etc.

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Measuring skills in addition to education credentials: what is in PIAAC?

Examine how migrants are faring in terms of literacy (mainly) and numeracy proficiency relative to natives.

Study the link between education level and literacy proficiency. Analyse employment, overqualification and wages of migrants

relative to natives. Identify different groups of migrants based on:

• Origin (EU/non-EU) • Foreign/ host-country qualification • Age at arrival • Duration of stay in the host country • Foreign/native language

Estimate the remaining gap between migrants and natives after all relevant factors have been taken into account.

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A first exploration of PIAAC data for migrants

Key determinants of literacy/numeracy proficiency and labour market outcomes

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Differences in average literacy proficiency between migrants and natives within and across countries

200

220

240

260

280

300

320

JPN

AU

S

SVK

CZE

POL

IRL

EST

CA

N

GB

R

AU

T

NLD

NO

R

BEL

DEU FI

N

USA

DN

K

KOR

SWE

ESP

FRA

ITA

Foreign-born Native-born

Literacy proficiency

Source: Survey of Adult Skills, 2012

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Important heterogeneity in literacy proficiency within education levels

Source: Survey of Adult Skills, 2012

150

170

190

210

230

250

270

290

310

330

350

NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB NB FB

L M H L M H L M H L M H L M H L M H L M H L M H L M H L M H L M H

AUS AUT CAN DEU ESP FRA GBR IRL NOR SWE USA

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Language and the country where the highest qualification was obtained account for 2/3 of the difference in literacy proficiency between migrants and natives

Source: Survey of Adult Skills, 2012

-60

-50

-40

-30

-20

-10

0AUT BEL CAN DEU DNK ESP EST FIN FRA GBR IRL ITA NLD NOR SWE USA

1. Adjusted for demographics and education 3. Adjusted for foreign qualification

2. Adjusted for host-country language 4. Adjusted for language and foreign qualification

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Literacy and numeracy proficiency are important determinants of overqualification

Source: Survey of Adult Skills, 2012

0

5

10

15

20

25

30

AUS AUT BEL CAN DEU DNK ESP EST FIN FRA GBR IRL ITA NLD NOR SWE USA

FB dummy (literacy skills) FB dummy (numeracy skills) FB dummy

Differences in literacy and numeracy proficiency between migrants and natives account for about 30% and 26% respectively of the overqualification gap

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Foreign university degrees are less valued than those acquired in the host country

Source: Survey of Adult Skills, 2012

Wage returns to tertiary education, by country of acquisition of highest qualification

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

DEU AUT ITA ESP NLD USA FRA IRL GBR BEL CAN EST DNK FIN NOR SWE

Foreign-born with foreign qualification Foreign-born with host-country qualification Native-born

In terms of literacy proficiency and labour market outcomes: Migrants who are native-speakers of the host-country language, Those who acquired their qualifications in the host country, Those who migrated as young children, Migrants from EU countries, Migrants who have been in the host country for 5 years or longer, International students who have recently entered the labour market

(in comparison with native-born recent labour market entrants). In the majority of OECD countries covered in the analysis, the gaps in labour market outcomes between migrants and natives get smaller or become non-statistically significant when all these factors as well as literacy proficiency have been accounted for.

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Certain migrant groups are faring better than others

Great degree of heterogeneity within the growing group of university graduates: immigrations policies that select people only on the basis of their

educational attainment may not be successful in identifying and attracting the most skilled ones.

emphasis should also be placed on language proficiency or specific work-related skills which should be tested prior to migration.

Language skills are key determinants of labour market success: Appropriate language training is needed prior to migration and after

arrival

Combine language training with some form of host-country short qualification or certification which would validate prior education.

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Main findings and policy discussion

Education and professional experience acquired abroad are strongly discounted in the host-country labour market in comparison with those acquired domestically: Need to encourage recognition and certification of experience in addition to

qualifications obtained abroad. International students: a potential pool of migrants with good literacy scores

and better labour market outcomes than those who migrate after completing their studies.

Scope for policies that select younger people who have acquired little experience before migrating?

Literacy proficiency is higher and labour market outcomes are better for migrants who arrived as young children and completed their education in the host country: policies that facilitate and encourage rapid family reunification in families with

young children.

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Main findings and policy discussion

Thank you for your attention!

www.oecd.org/migration

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