Do immigrants experience labor market mismatch? New evidence from the US PIAAC

Background

One way of evaluating immigrants’ labor market outcomes is to assess the extent to which immigrants are able to enter into jobs that are commensurate with their education and experience. An imperfect alignment between workers’ educational qualifications and these required for their current job, or education-job mismatch, has implications for both the broader economy and individual workers. In this study, we investigate the factors associated with education-job mismatches among US workers by immigrant generation.

Methods

We analyzed the data from the US sample of the Program for the International Assessment of Adult Competencies (PIAAC) 2012/2014. Our analytic sample included 4022 employed (full and part-time) individuals between the ages of 20–65 years. We documented the distribution of education-job mismatches across selected independent variables and estimated the relationship between the individual characteristics of workers such as race, gender, presence of children, location, time in the country and knowledge of English for first-generation immigrant workers, and education-job mismatch using multinomial logistic regressions for the full sample and for the sample of first- and second-generation workers.

Results

We found that on average, immigrant workers in the US labor market were more likely to hold jobs which required less education that they had (being overmatched for the job), with first-generation workers being overmatched more frequently than second-generation workers. The probability of being overmatched for immigrant workers declines with the length of stay, and workers who are proficient in English are less likely to be overmatched. Our results also suggest that there may be labor market disadvantages to immigrant status that persist beyond the first-generation.

Conclusions

Previous research demonstrated that over-education depresses wages and lowers workers’ standards of living and their abilities to accumulate wealth. Our findings confirm that this dynamic may be particularly acute for first- and second-generation workers who are finding it difficult to become fully integrated into US labor markets, even though the factors behind the mismatch differs between the two immigrant generations.