ORU Analyses of Immigrant Earnings in Australia, with International Comparisons

41 Pages Posted: 15 Oct 2009

See all articles by Barry R. Chiswick

Barry R. Chiswick

University of Illinois at Chicago; IZA Institute of Labor Economics

Paul W. Miller

Curtin University of Technology - School of Economics and Finance; IZA Institute of Labor Economics; Curtin University - Centre for Research in Applied Economics

Abstract

This paper examines the way immigrant earnings are determined in Australia. It uses the overeducation/required education/undereducation (ORU) framework (Hartog, 2000) and a decomposition of the native-born/foreign-born differential in the payoff to schooling developed by Chiswick and Miller (2008). This decomposition links overeducation to the less-than-perfect international transferability of immigrants' human capital, and undereducation to favorable selection in immigration. Comparisons are offered with findings from analyses for the US and Canada to enable assessment of the relative impacts of favorable selection and the limited international transferability of human capital to the lower payoff to schooling for the foreign born. The sensitivity of the results of the decomposition to several measurement issues is assessed.

Keywords: immigrants, schooling, occupations, earnings, rates of return, selectivity, skill transferability, ORU analysis

JEL Classification: F22, I21, J24, J31, J61

Suggested Citation

Chiswick, Barry R. and Miller, Paul W., ORU Analyses of Immigrant Earnings in Australia, with International Comparisons. IZA Discussion Paper No. 4422. Available at SSRN: https://ssrn.com/abstract=1489245

Barry R. Chiswick (Contact Author)

University of Illinois at Chicago ( email )

601 S. Morgan Street, Room 2103UH
Chicago, IL 60607-7121
United States
312-996-2683 (Phone)
312-996-3344 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Paul W. Miller

Curtin University of Technology - School of Economics and Finance ( email )

GPO Box U1987
Perth WA 6845
Australia

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Curtin University - Centre for Research in Applied Economics ( email )

GPO Box U1987
Perth, Western Australia 6845
Australia

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