The Education–Occupation (Mis)Match of Asia-Born Immigrants in Australia

Abstract

Skills shortages in the developed world are being addressed through selective immigration programs. Immigrant skills wastage signifies costly inefficiencies at both the micro and macro level. In addition to impacts on individual’s job satisfaction, work effort, and wellbeing, skills wastage reduces the intended productivity gain from highly skilled immigrants. This study examines the mismatch between immigrants’ education and the occupations they attain in Australia. Using a sample of 73,649 females and 120,602 males from the 2016 Australian census, we extend the Realized Matches method of measuring over-education, disaggregating over-education into “moderate over-education” and “severe over-education.” Multinomial logistic regression results show that the likelihood of severe over-education is considerably higher for Asian immigrants, and most of all the China-born, Indonesia-born, and India-born, than the Australia-born, and is also higher than for immigrants born in other countries, even after controlling for a range of other characteristics. Almost all overseas birthplace groups are also significantly more likely to be moderately over-educated than the Australia-born, especially those groups in which higher percentages gained permanent residence through skilled migration. The results highlight the heterogeneity of immigrant education–occupation mismatches and demonstrate that the real extent of immigrant over-education may have been disguised in previous studies by assuming that all incidences of over-education are equally consequential. In view of the considerable skills wastage indicated by the severe over-education of the Asia-born, the selection criteria by which skilled immigrants are admitted may need rethinking.

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Notes

  1. 1.

    The Humanitarian Program resettles refugees who have been affected by persecution in their home country and reunites refugees with their family in Australia (DHA 2017).

  2. 2.

    The Family and Special Eligibility stream accounted for a further 29.4% and 0.1%, respectively, of the total Migration Program, with the remaining 2.1% allocated to Child visas.

  3. 3.

    Formally known as the Immigration Restriction Act 1901 and officially abolished in 1973 by the Whitlam Labour Government in favor of a policy of multiculturalism.

  4. 4.

    New Zealand citizens are excluded from the Migration Program and can remain in Australia indefinitely under a temporary Special Category Visa if they remain a New Zealand citizen. As such, it is problematic to categorize them as either temporary or permanent.

  5. 5.

    Unlike offshore applicants, job experience requirements were waived, and they received extra points for their Australian credentials (Birrell and Perry 2009).

  6. 6.

    The percentages who attained a Master Degree level qualification are particularly high among the India-born and China-born (25.5% and 18.0%, respectively) when compared to the corresponding 3.6% of the Australia-born aged 15+.

  7. 7.

    Mainly Business, Human Resource and Marketing Professions, Health Professions, and ICT Professions.

  8. 8.

    Human capital refers to the knowledge and skills acquired through education and experience (Constant and Zimmermann 2013).

  9. 9.

    The RM method has been regarded as the most suitable method for use with census data (Chiswick and Miller 2009).

  10. 10.

    The modal level of education is preferred to the mean level due to the presence of outliers.

  11. 11.

    The WSA method is based on the minimum level of education a worker believes is required to get or do the job. Due to its subjective nature, the level of education required may be biased upward by workers’ tendency to inflate the standing of their job (Carroll and Tani 2013; Hartog 2000).

  12. 12.

    For example, Factory Process Workers are Skill Level 5, commensurate with a Certificate I or compulsory secondary education while Health Professionals are Skill Level 1, commensurate with a Bachelor degree or higher qualification.

  13. 13.

    There is further complexity in applying the JA method in an Australian context. At the 2-digit level some occupational categories include a wide range of educational levels. For example, the educational level of Protective Service Workers can range from secondary education (Skill Level 5) to an Associate Degree, Advanced Diploma, or Diploma (Skill Level 2) (ABS 2013).

  14. 14.

    Includes New Zealand, United Kingdom, Republic of Ireland, United States of America, Canada, and South Africa.

  15. 15.

    The census does not collect ‘number of children ever born’ for males.

  16. 16.

    The comparisons between age groups for overseas birthplace groups are calculated by multiplying the odds for the birthplace group effect and the odds for the corresponding birthplace by age interaction effect.

  17. 17.

    Duration of residence has a positive effect on the likelihood of under-education, particularly for males. Non-citizens are significantly more likely to be undereducated than citizens, married females are significantly less likely to be undereducated than their never married, divorced, or separated counterparts, and childless females are significantly less likely to be undereducated than females with children. Males and females who speak a LOTE and do not speak English well or at all are considerably more likely to be undereducated in a job than those who speak English only.

  18. 18.

    Indians have been victim to racially motivated attacks in Australia (Graycar 2010; Singh and Cabrral 2010).

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Appendices

Appendix 1

See Table 3.

Table 3 Assumed years of education of the highest non-school qualification and highest year of school completed, Australia 2016

Appendix 2

See Table 4.

Table 4 Percentage distributions of variables used in multinomial logistic regression analysis of education–occupation mismatch, Australia 2016 (%)

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De Alwis, S., Parr, N. & Guo, F. The Education–Occupation (Mis)Match of Asia-Born Immigrants in Australia. Popul Res Policy Rev 39, 519–548 (2020). https://doi.org/10.1007/s11113-019-09548-9

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Keywords

  • Over-education
  • Immigrants
  • Skilled migration
  • Labor market integration
  • Australia
  • Occupation