Educational mismatches in the EU: immigrants vs native

Abstract

The purpose of this paper is to analyse and explain the factors contributing to the observed differences in skill mismatches (vertical and horizontal) between natives and immigrants in EU countries. Using microdata from the 2007 wave of the Adult Education Survey (AES), different probit models are specified and estimated to analyse differences in the probability of each type of skill mismatch between natives and immigrants. Yun's decomposition method is used to identify the relative contribution of characteristics and returns to explain the differences between the two groups. Findings: Immigrants are more likely to be skill mismatched than natives. The difference is much larger for vertical mismatch, wherein the difference is higher for immigrants coming from non-EU countries than for those coming from other EU countries. We find that immigrants from non-EU countries are less valued in EU labour markets than natives with similar characteristics -a result that is not observed for immigrants from EU countries. These results could be related to the limited transferability of human capital acquired in non-EU countries. Social implications: The findings suggest that specific programs to adapt immigrants' human capital acquired in the home country are required to reduce differences in the incidence of skill mismatch and better integration into EU labour markets. Originality: This research is original, because it distinguishes between horizontal and vertical mismatch -an issue that has not been considered in the literature on differences between native and immigrant workers- and due to the wide geographical scope of our analysis, which considers EU and non EU-countries.