Abstract
This paper uses register-based panel data to examine over-education amongst immigrants in Denmark. Foreign-educated immigrants are found to be more prone to over-education than both native Danes and immigrants educated in Denmark. Labour market experience reduces this risk, whereas periods of unemployment make a person more likely to accept a job for which he is over-qualified. Over-educated workers earn slightly more than their adequately matched colleagues, but less than if they had been appropriately matched in a higher level job. Foreign-educated immigrants gain the least from over-education.
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Notes
The dataset stops in 2002 because the sources used to construct the Danish ISCO occupation code (DISCO) change, causing the variable to become increasingly unreliable with many missing values.
When using the entire sample (i.e. including individuals with primary and secondary schooling as their highest attained level of education), the mean method (described in the main text below) shows that the share of over-educated individuals is zero for individuals at these levels of education.
The limits and values defining ‘required’ education using the mean- and mode-based approaches, respectively, and the shares of over-educated workers by occupational category and ethnicity are available on request.
The rates of over-education are not sensitive to increasing the lower age limit to 30 years. Using the mean approach, the shares of over-educated Danes, immigrants with Danish education and immigrants with foreign education are 15.1%, 20.5% and 40.4%, respectively. Using the mode approach, the shares of over-educated Danes, immigrants with Danish education and immigrants with foreign education are 33.2%, 40.7% and 47.6%, respectively.
Some authors attempt to deal with a potentially endogenous explanatory variable by using an instrument. Often family-related instruments are chosen, but they are often not yet convincing and turn out to be weak and/or invalid. Korpi and Tåhlin (2006), for example, use sibship size, place of residence during childhood, economic problems and disruption in the family of origin as instruments but find that they are weak. Weak instruments lead to imprecise results and choosing an invalid instrument may even aggravate a possible bias. In this analysis, we therefore refrain from using instrumental variables methods.
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Acknowledgements
The author would like to thank two anonymous referees for constructive comments and useful suggestions on earlier versions of the paper. I would also like to acknowledge the advice and suggestions provided by my colleagues Eskil Heinesen and Gabriel Pons Rotger. All remaining errors are my own.
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Responsible editor: Klaus F. Zimmermann
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Nielsen, C.P. Immigrant over-education: evidence from Denmark. J Popul Econ 24, 499–520 (2011). https://doi.org/10.1007/s00148-009-0293-0
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DOI: https://doi.org/10.1007/s00148-009-0293-0