Cedefop’s most recent research paper shows that migrants from outside the EU are more likely to find jobs beneath their real skills level (‘overeducation’), while ethnic minorities are more typically found to lack the education level that the labour market requires (‘undereducation’).

Limiting mismatch is good not just for individuals but also for the European economy, allowing a better use of human potential. Accordingly, the report makes policy suggestions. Policy responses are needed: a focus on migrants from non-EU countries; an attempt to put migration in a more positive light than is often the case; developing and better implementing common standards for recognising qualifications obtained abroad; improving job access for both groups by supporting their competitiveness to apply for jobs; and encouraging employers to give people with a migrant background more job and training opportunities. Such policies could contribute to making better use of migrants’ skills and alleviating current and future skill shortages in Europe.

The paper (download it here) is based on data from the European Social Survey (from 2004 & 2008) and the European Labour Force Survey.

These data differ from country to country. Likewise (p.10) Data from the European social survey 2004 suggest that the percentage of respondents in the ethnic minority population who feel discrimination ranges from less than 10% in Luxembourg to nearly 90% in the Czech Republic. Bigger top countries are Finland & Switzerland from the point of view of discrimination, where migrants feeling discriminated are 'only' 8% vs. 12%, and Ethnic minority 17% vs. 23%.

Another interesting detail is that (p. 11) "the effect of one-year education on earnings is higher for native-born than foreign-born employees (Chiswick and Miller, 2008). In an early US study, Chiswick (1978) found that native-born Americans received a return of 7.2% for a year of education compared to 5.7% for the foreign-born. Similar findings were reported for Canada (Baker and Benjamin, 1994), Australia (Beggs and Chapman, 1988), and the UK (Shields and Price, 1998) as well as in some other countries including Germany and Israel. Chiswick and Miller themselves suggested three possible explanations:

(p.27) "The incidence of unemployment within the sample populations ranges from 2 to 4% in Denmark, the Netherlands, Norway, Sweden and Switzerland, to 13% in Hungary, while inactivity levels are slightly more variable, ranging from 3 to 6% in Denmark, Finland, Norway and Sweden, to 18% in Spain and Netherlands. The rate of undereducation is particularly high in Hungary, 41%, while it is less than 20% in eight countries: Belgium, Denmark, Finland, Germany, Portugal, Norway, Sweden and Switzerland.

On average, less than 10% of workers feel part of a discriminated group.Variation among countries is low, though the UK and France are slight outliers with 14 and 11% respectively, perhaps reflecting their higher proportion of migrants and ethnic minorities. Intergenerational mobility, in the context of our study, describes the extent to which individuals manage to attain higher levels of education than their father. In most countries mobility rates exceed 50%, with Spain (71%), Poland (63%), Portugal (64%) and Finland (63%) reporting the highest incidences of intergenerational progression. In contrast, the figure is only 30% in Germany, 40% in Switzerland & 44% in UK. Finally, with respect to the take up of training, measured in terms of whether an individual has improved their level of knowledge or skills in the last 12 months, the incidence is highest in Finland and Sweden (70 and 71% respectively) and lowest in Portugal (18%) and Hungary (26%).

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(a) there may be self-selection in migration which impacts more on the less well educated;

(b) there may be a low degree of international skill transferability;

(c) discrimination may increase with level of education.

P. 12: What do the empirical results show about the mismatch? First, for the US, Chiswick and Miller (2008) analysed 510 three-digit occupations in the 2000 census. Of the native-born men, 42.9% are correctly matched against 28.09% of the foreign-born, who are more likely to be undereducated. The returns on education for appropriately matched men are approximately the same for native- and foreign-born workers, but returns on overeducation are higher for the n native-born (5.6% versus 4.4% for the foreign-born). In contrast, the penalty for undereducation is lower for the foreignborn (-2.1% versus -6.7% for the native-born). Chiswick and Miller suggested the lower pay-off on overeducation for the foreign-born is consistent with less-thanperfect international transferability of skills, while the higher return on undereducation may be due to higher motivation or ability among those foreignborn who possess lower levels of education.

The categories are, therefore, very broad. In all but two countries (New Zealand and Slovakia) immigrants are more likely to be overqualified than host country nationals. This is especially the case in southern Europe (e.g. Greece, Spain and Italy) and in some countries of northern Europe (e.g. Denmark and Sweden), where the percentage of immigrants overqualified is at least twice that of the native-born.

In general, the EU (2008) suggested that, in terms of employment and unemployment, immigrants have fared better in the new host countries of southern Europe than in the old Member States of northern Europe. It attributes this to several factors: the relatively high shares of migration in northern Europe which are unrelated to employment, but more to humanitarian concerns; the tougher restrictions on access to employment in northern Europe and lower acceptance of undeclared or irregular work; and differences in the welfare state systems, with the less generous systems in southern Europe putting greater pressure on migrants to work there.

The European Commission (2008) drew attention to the need to distinguish between mobility within the EU and migration from outside the EU, referred to as third country migrants. The latter are twice as numerous as the former and face unemployment rates which are three times as great, lower employment rates and are often more likely to have lower quality jobs or ones for which they are overqualified.

 

Travelling to work and its effects (by car ownership) is one aspect not discussed so far. Gautier and Zenou (2010) pointed out that many members of ethnic minorities (and presumably immigrants too), cannot afford a car; this can generate differences in labour-market outcomes, even with no discrimination or exogenous differences in distance from residence to work.Consistent with the US evidence, Battu and Sloane (2004) noted that no car ownership, shorter distance, and longer duration in commuting to work also applied to their ethnic minority sample. Further, no car ownership also implies lower earnings. According to Green et al. (2007) no car ownership in Australia means lower employment probability.