Selective Immigration, Occupational Licensing, and Labour Market Outcomes of Foreign-Trained Migrants

43 Pages Posted: 12 Mar 2018

See all articles by Massimiliano Tani

Massimiliano Tani

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

Abstract

This paper studies occupational licensing as a possible cause of poor labour market outcomes among economic migrants. The analysis uses panel data from Australia, which implements one of the world's largest selective immigration programmes, and applies both cross-sectional and panel estimators. Licensing emerges as acting as an additional selection hurdle, mostly improving wages and reducing over-education and occupational downgrade of those working in licensed jobs. However, not every migrant continues working in a licensed occupation after settlement. In this case there is substantial skill wastage. These results do not change over time, after employers observe migrants' productivity and migrants familiarise with the workings of the labour market, supporting the case for tighter coordination between employment and immigration policies to address the under-use of migrants' human capital.

Keywords: skilled immigration, over-education, occupational downgrade, immigration policy, occupational licensing

JEL Classification: J8, J24, J61

Suggested Citation

Tani, Massimiliano, Selective Immigration, Occupational Licensing, and Labour Market Outcomes of Foreign-Trained Migrants. IZA Discussion Paper No. 11370, Available at SSRN: https://ssrn.com/abstract=3137501

Massimiliano Tani (Contact Author)

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

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

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

IZA Institute of Labor Economics

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