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
 Introduction

• 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?

2
 Outline

I. The qualifications of immigrants

II. The value of immigrant qualifications in the labour

market
III. From qualifications to skills: the PIAAC survey

3
 Host-country vs. foreign qualifications

• 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
4
– 2008 Ad-hoc module on immigrants in the European Labour Force Survey
 Immigrants are on average less educated than
the native-born, but the differences are driven
by those with foreign qualifications…

Years of education for immigrants compared with the native-born

1.5
1 Europe United States

0.5
0
-0.5
-1
-1.5
-2
-2.5
-3
Host-country Foreign Education All Foreign-born
education

…and larger in the United States than in Europe 5

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

Years of education for immigrants with foreign qualifications

compared with the native-born, by years of residence (ysm)

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

0

-0.5

-1 EU27 immigrants

-1.5 non-EU27 immigrants

-2 all immigrants - EU

-2.5 all immigrants - US

-3

-3.5

-4
6
 In Europe, the returns to foreign qualifications
in terms of employment are lower than those
to host-country education…
Employment rate by education level in Europe
0.4

0.3

0.2

0.1

-0.1
ISCED 0-1 ISCED 2 ISCED 3-4 ISCED 5 ISCED 6

Native-born Host-country Education Foreign Education

...and those to non-EU qualifications are lower than

7
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
0.6

0.5

0.4

0.3

0.2

0.1

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

Native-born Host-country Education Foreign Education

8
In Europe, the incidence of over-qualification
among the employed tertiary-educated is much
higher among immigrants
Overqualification rates for tertiary-educated immigrants
compared with native-born; by origin of qualifications

25

20

15

10

-5
Europe United States

All foreign-born
with host-country education
with foreign education
with EU education
with non-EU education
9
 Category of migration: the single most
important determinant of outcomes

• 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.
10
 Host-country language proficiency is an
important determinant of outcomes
• 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.

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 Recognition of foreign qualifications is
associated with better outcomes

• 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.

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

Detailed
labour market
outcomes

Personal Migrant
characteristics: characteristics:
age, gender, country of birth,
highest year of arrival,
qualification, years foreign
of schooling qualification,
languages spoken
Literacy,
numeracy
Training, proficiency
skills used / problem
at work, solving
etc.
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 A first exploration of PIAAC data for migrants

 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) Key determinants of
• Foreign/ host-country qualification literacy/numeracy
• Age at arrival proficiency and
• Duration of stay in the host country labour market
• Foreign/native language outcomes
 Estimate the remaining gap between migrants and natives after
all relevant factors have been taken into account.

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

Literacy proficiency

Foreign-born Native-born
320

300

280

260

240

220

200
SVK

FRA

ITA
JPN

AUS

CAN

AUT

USA
NLD

NOR

ESP
EST

GBR

DEU

DNK
BEL
POL

IRL

FIN
CZE

KOR

SWE
Source: Survey of Adult Skills, 2012

15
 Important heterogeneity in literacy
proficiency within education levels
350

330

310

290

270

250

230

210

190

170

150
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

Source: Survey of Adult Skills, 2012 16

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

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

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

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

-10

-20

-30

-40

-50

-60

Source: Survey of Adult Skills, 2012

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 Literacy and numeracy proficiency are important
determinants of overqualification

Differences in literacy and numeracy proficiency between migrants and natives

account for about 30% and 26% respectively of the overqualification gap

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

30

25

20

15

10

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

Source: Survey of Adult Skills, 2012

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 Foreign university degrees are less valued than
those acquired in the host country
Wage returns to tertiary education, by country of acquisition of highest
qualification

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

0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
DEU AUT ITA ESP NLD USA FRA IRL GBR BEL CAN EST DNK FIN NOR SWE

Source: Survey of Adult Skills, 2012 19

 Certain migrant groups are faring better
than others
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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 Main findings and policy discussion

 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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Thank you for your attention!

www.oecd.org/migration

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