Education–Occupation Mismatch and Nativity Inequality Among Highly Educated U.S. Workers

Abstract

Extensive research has documented persistent nativity inequality in the U.S. labor market, even among high-skilled immigrants. Yet, this phenomenon has not been suf­fi­ciently explained. This study inves­ti­gates whether dif­fer­ent types of edu­ca­tion– occupation mismatch are a source of this inequality. Using longitudinal data from the Survey of Income and Program Participation, we exam­ine nativ­ity dif­fer­ences in the inci­dence and wage pen­alty of edu­ca­tion–occu­pa­tion mis­match among highly edu­cated work­ers. The results dem­on­strate that high-skilled immi­grants, espe­cially those with foreign degrees, are more vulnerable to vertical and horizontal mismatch and suffer higher wage pen­al­ties from mismatched employ­ment than sim­i­larly edu­cated native-born work­ers. Auxiliary ana­ly­ses show that the dis­ad­van­tage for­eign-edu­cated skilled immi­grants expe­ri­ence is largely con­cen­trated among immi­grants from countries with lower qual­ity ter­tiary edu­ca­tion, immi­grants with lower English pro­fi­ciency, and those with degrees in non-STEM fields and fields with demand­ing licens­ing require­ments. These results point to skilled immi­grants’ lim­ited human cap­i­tal trans­fer­abil­ity, which stems from the qual­ity and appli­ca­bil­ity of edu­ca­tional cre­den­tials, lan­guage pro­ficiency, and institutional barriers.