Successful due to STEM? Labour market returns to STEM qualifications among skilled immigrants in Germany

Abstract

Against the growing demand for the STEM labour force, the study examines labour market returns to STEM qualifications among immigrants who arrived in Germany since the 1980s. Analysing the German microcensus data for years 2015 and 2016, we demonstrate that skilled immigrants with STEM qualifications largely attain better labour market outcomes in Germany compared to immigrants without STEM qualifications, thus narrowing the gap to their native-born counterparts. Male immigrants succeed in utilizing their STEM capital better than female immigrants, but all immigrants face difficulties in translating their STEM qualifications into STEM employment. Our analyses further focus on returns to various STEM qualifications, attesting that medical qualifications are especially beneficial for Germany’s female immigrants. The analysis of heterogeneous effects of STEM qualifications across major migrant groups reveals that Eastern European male immigrants make the best of their STEM qualifications, whereas among women, STEM qualified from Turkey or MENA countries are the most successful. These and other findings are discussed both from the supply and demand sides of the labour market.