The Wage Premium of Foreign Education: New Evidence from Australia

21 Pages Posted: 9 Jun 2012

See all articles by Gavin Chan

Gavin Chan

Government of Western Australia

Chris Heaton

Macquarie University, Macquarie Business School

Massimiliano Tani

University of New South Wales - Australian Defence Force Academy; IZA Institute of Labor Economics

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Abstract

We study whether Australian employers recognise immigrants' education acquired abroad, and if so how. Using data from the Longitudinal Surveys of Immigrants in Australia, we apply interval regression to model migrant hourly earnings. We find substantially higher returns from human capital obtained in Australia and other OECD countries compared with non-OECD countries. These results suggest that the transfer of human capital acquired abroad is mediated by the country in which it was acquired, as found for Israel (Friedberg (2000) and the US (Bratsberg and Ragan (2002)). The results also suggest that immigrants from non-OECD countries are the ones who can gain the most from obtaining further education in Australia, and that targeted rather than generic policies in this area could reduce the extent of the education-occupation mismatch amongst immigrants.

Keywords: immigration, education, economic assimilation

JEL Classification: C34, J24, J61

Suggested Citation

Chan, Gavin and Heaton, Chris and Tani, Massimiliano, The Wage Premium of Foreign Education: New Evidence from Australia. IZA Discussion Paper No. 6578, Available at SSRN: https://ssrn.com/abstract=2080322

Gavin Chan (Contact Author)

Government of Western Australia

Australia

Chris Heaton

Macquarie University, Macquarie Business School ( email )

New South Wales 2109
Australia

Massimiliano Tani

University of New South Wales - Australian Defence Force Academy ( email )

Sydney, NSW 2052
Australia
+612 6268 8512 (Phone)
+612 6248 8450 (Fax)

HOME PAGE: http://www.unsw.adfa.edu.au/sbus/staff_cvs/about_max_t.html

IZA Institute of Labor Economics

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

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