Foreign Diploma versus Immigrant Background Determinants of Labour Market Success or Failure?

Transcription

1 Støren, Liv Anne and Jannecke Wiers-Jenssen Foreign Diploma versus Immigrant Background Determinants of Labour Market Success or Failure? Accepted manuscript per 24 June The final, definite version is available at Journal of Studies in International Education, Volume 14 Number 1, February 2010, Abstract This article compares the labour market situation of graduates with different types of international background. The authors look at four groups of graduates: immigrants and ethnic Norwegians graduated in Norway and immigrants and ethnic Norwegians graduated abroad. By employing multinomial logistic regression analyses the authors find that ethnic Norwegians educated abroad face a higher risk of labour market mismatch in terms of unemployment and overqualification than Norwegians graduated domestically. Non-Western immigrants had an even higher risk of unemployment and skills mismatch, regardless of the origin of their education. The results indicate that education from abroad is not fully transferable to a domestic labour market and, in addition, that forms of discrimination against non-western immigrants exist. Skills acquired through higher education (HE) are increasingly brought across borders by refugees, labour migrants, other immigrants, and by mobile students. Student mobility has grown substantially in the last decade (Tremblay, 2005), and approximately 2.7 million students study outside their country of origin (OECD, 2007). Among Western countries, Norway is one of the countries with the highest proportion of its total student population abroad (Tremblay, 2000; UNESCO, 2006). The vast majority return to Norway after graduation. However, little is known about labour market prospects of the returnees relative to home graduates or relative to immigrants. A central argument for encouraging student mobility is the assumption that international experience is in demand in the labour market. 1

2 From this perspective, it is highly relevant to investigate whether mobile students are successful regarding obtaining (relevant) employment. Due to high immigration rates during the last two decades, an increasing number of immigrants with HE are entering the European labour markets. This also applies to Norway. Some of these have graduated in their home countries and some from Higher Education Institutions (HEIs) in the immigrant country. Internationally it is found that immigrants with HE have higher unemployment rates/lower employment rates than their native counterparts, for instance in Canada (Zietsma, 2006), UK (Dustman et al., 2003) and France (Frickey et al., 2006). Also in Norway previous studies have shown that non-western immigrants graduating from Norwegian universities and colleges have a higher risk of unemployment than ethnic Norwegians with the same type and level of education (Støren, 2004). Little is known, however, about the labour market outcome of immigrants with higher education from abroad compared to immigrants graduated in the immigration ( host ) country. In this paper the labour market outcomes of mobile students as well as immigrants are addressed. We use a data set that allows us to compare the situation of both immigrants and ethnic Norwegians educated abroad with immigrants and ethnic Norwegians with a corresponding degree from Norwegian HEIs. We examine whether variation in labour market mismatch in terms of the probability of unemployment and over-qualification can be attributed to the origin of the diploma or to the origin of the graduate. Hence, effects of two major dimensions are investigated: ethnic origin and origin of diploma. Previous empirical research rarely includes both these dimensions. 2

3 Theoretical Perspectives and Previous Studies Theories which aim at explaining variations in the outcome and opportunities in the labour market are in many ways complementary and several perspectives, focusing or either the supply side or the demand side, are useful. Some of these are presented below. Country-specific human capital. The most well-known theory is the human capital theory (Becker, 1964) which assumes a positive relationship between the amount of education and productivity. Because of higher productivity the best educated will be the most successful in the labour market. The explicit focus is on educational level, but according to a common notion human capital also embodies educational field, different types of skills and other individual attributes. The standard version of the theory does not distinguish between foreign and domestic education. However, in the literature on immigrants labour market outcome a distinction is often made between country-specific and general human capital (Friedberg, 2000; Chiswick and Miller, 2003). The productivity gains related to individual skills partly depend on the country in which the skills were acquired. The assumption is that foreign and domestic education is not equivalent as parts of the education are related to country-specific human capital. Examples of the latter are language skills, cultural knowledge of norms and customs in the specific country s working life, and professional skills adapted to national requirements. In general, such components of human capital may be more applicable in the country where the education is undertaken than in other countries, and a higher level of (relevant) country-specific skills may increase the returns in the labour market. Nevertheless, country-specific human capital from abroad will certainly be in demand in certain professions, and some country-specific skills (e.g. proficiency in English), may be considered as transnational human capital. 3

4 Effects of education from abroad have been investigated in a range of international studies from the perspective of investigating immigrant and minority groups returns to education in the immigration (host) country. These studies find that education from abroad gives a poorer outcome than education undertaken in the immigration country. This has been shown for the USA (Borjas, 1995; Funkhouser and Trejo, 1995; Bratsberg and Ragan, 1998; Zeng and Xie, 2004), for Canada (Baker and Benjamin, 1994; Krahn et al., 2000), and for Israel (Friedberg, 2000). These studies also show that the benefits of education are dependent upon where such education was undertaken, with particularly poor results for African and Asian countries with a low GNP (Friedberg, 2000; Bratsberg and Ragan, 2002). A Swedish study of the risk of being unemployed or over-qualified among four immigrant nationality groups (Duvander, 2001) indicated different results. Immigrants who had taken their education in Sweden were more likely to be unemployed than other immigrants. According to Duvander (p. 220), the reason might be that immigrants who are likely to be unemployed are selected into Swedish educational programmes. The risk of being educationally over-qualified was, however, reduced among immigrants who had undertaken education during their time in Sweden (Duvander 2001, p. 223). The concept of country-specific human capital may also be relevant in analysing labour market returns of mobile students who return to their home country after graduation. Few studies have addressed the labour market outcome of this group. Research on former mobile students focus more frequently on exchange students (participants in organized study programmes) rather than free movers (students who are not part of any exchange programme and who generally have longer sojourns abroad), and control groups of domestically educated students are rarely included. A comparison of Malaysian graduates educated abroad and domestically found no difference in employment outcomes between the two groups (Ball and 4

5 Chik, 2001). In a recent study of graduates from 13 European countries five to six years after graduation, the so-called REFLEX study (Allen and van der Velden (eds.) ), it was found that graduates who had been internationally mobile during study, either for study or work, on average have ten per cent higher income than non-mobile students, and are less often overqualified for their jobs than other students (Teichler, 2007). The tendency to experience an economic reward from having been temporarily mobile applies to many countries in the study, but not for all. The graduates in the REFLEX study did not graduate abroad, but had been temporarily abroad during their study period. Regarding employers attitudes, one report from Sweden indicates that employers prefer recruiting graduates who have undertaken part of their education abroad, rather than graduates who have undertaken their entire study programme abroad or solely in Sweden (Zadeh, 1999). A study from Finland, concludes that many employers are sceptical to HE attained abroad (Garam, 2005). A survey among European employers found that graduates with mobility experience are regarded as more competent not only in language and professional knowledge of other countries, but also regarding skills such as adaptability, initiative and problem-solving abilities (Bracht et al., 2006). Language proficiency as an aspect of human capital. Proficiency in the language of the country where one seeks work may be an important aspect of the individual s human capital. Language proficiency is often correlated with the residence time in the country (Chiswick and Miller, 2001; Chiswick et al., 2002). Improving language proficiency and an increase in the number of years living in the country, increases the labour market outcome (Niesing et al., 1994; Bratsberg and Ragan, 1998; Borjas, 1999; Schaafsma and Sweetman, 2001; Chiswick and Miller, 2002; 2003; Dustmann and Fabbri, 2003). Zietsma (2006) finds, for instance, that among very recent immigrants in the Canadian labour force with a university degree who had 5

6 stayed in Canada for five years or less the unemployment rate was 11.8 per cent, versus 6.3 per cent among immigrants who had resided in Canada for five to ten years, and the corresponding per cent for persons born in Canada was 2.8 per cent. Another interesting Canadian result is that of Chiswick and Miller (2003) who find that there is complementarity between language skills and schooling; the greater the proficiency in the language(s) of the host country, the larger is the effect of schooling on earnings. Social capital. Resources situated in social networks are often labelled as social capital (Bourdieu, 1985; Coleman, 1990). Such resources may have an influence on labour market opportunities. Seen in relation to other forms of capital, social capital may be described as follows: Whereas economic capital is in people s bank accounts and human capital is inside their heads, social capital inheres in the structure of their relationships. To possess social capital, a person must be related to others (Portes, 1998, p. 12). A description which resembles the concept of social capital is made by Granovetter (1995) by the term strength of weak ties. A network of weak ties comprising friends, previous colleagues and employers in addition to relatives may, in total, represent much information useful for getting a (relevant) position. Transferred to the situation of abroad-graduates and immigrant graduates, this may imply that both groups will have fewer weak ties useful for obtaining a job. Theories of discrimination. The theories mentioned above focus mainly on the attributes of the supply side of the labour market; other theories focus on characteristics of the demand side. Theories of discrimination are examples of the latter. Discrimination may have several forms of which preference discrimination ( taste for discrimination, Becker 1971) is one. This may occur both in a strong form, supposedly rather seldom, and in a weaker form. A second kind of discrimination is when the employer prefers a job seeker from the majority 6

7 group because of other people s prejudice (prejudice (Rogstad 2001, with reference to Merton, 1948). A third kind of discrimination is statistical discrimination. While the first two forms of discrimination refer to ethnic minorities and the majority, statistical discrimination may also be relevant to former mobile students (abroad graduates). The reason for this is that lack of information on the relevant qualifications is the central factor behind statistical discrimination. Statistical discrimination occurs when an employer prefers one category of job seekers in preference to another because he expects that one has more of the desired properties (Cain, 1986; Thurow, 1975). It is assumed that employers want to reduce the risk of choosing the wrong candidate without investing too much time in information-seeking. Research Questions and Hypotheses The main question is to what degree labour market mismatch in early career measured in terms of unemployment risk and risk of over-qualification relative to holding a relevant job varies between persons educated abroad or in Norway, or by immigrant status. This is measured 3½ 5 years after graduation, which is at the time of data collection. Factors explaining unemployment may not be the same as the factors explaining overqualification. Holding a job that does not correspond to one s educational level for some persons may serve as an alternative to unemployment. If the job seeker s reservation wage the lowest wage rate at which a worker would be willing to accept a particular type of job, (Devine and Kiefer, 1991; Niesing et al., 1994) is (relatively) high the job seeker might choose to keep on searching for suitable work and then risk an extended unemployment period, instead of entering a job where he/she is over-qualified and where the salary is lower than expected. This may affect the groups studied in different ways. If, for instance, non- Western immigrants have lower expectations than ethnic Norwegians, this could imply that 7

8 the probability of being unemployed is more or less the same for these groups, but concurrently that there might be differences between the groups in the probability of overqualification in the job. On the other hand, it is also possible that immigrants and abroadgraduates face problems both concerning over-qualification and unemployment. This is investigated below. Based on previous studies as well as theoretical considerations outlined above, we have formulated our expectations in the following six hypotheses: 1. Both ethnic Norwegians graduated abroad and immigrants graduated abroad will have a higher unemployment risk than ethnic Norwegians graduated domestically. 2. Non-Western immigrants graduated in Norway will have a lower unemployment risk than non-western immigrants graduated abroad, but higher than ethnic Norwegians graduated in Norway. 3. Non-Western immigrants graduated in Norway will have a lower risk of over-qualification than non-western immigrants graduated abroad, but higher than ethnic Norwegians graduated in Norway. 4. Ethnic Norwegians graduated abroad as well as immigrants graduated abroad will have a higher risk of over-qualification than ethnic Norwegians graduated domestically. 5. The longer the immigrant has resided in Norway the lower will be the risk of unemployment and over-qualification. 6. Immigrants with good proficiency in the Norwegian language will have a lower unemployment risk and lower risk of over-qualification than immigrants with a poor proficiency in the Norwegian language. 8

9 Data The data set consists of 3224 persons participating in a Norwegian survey conducted in the period November 2002 March In the analyses, we exclude cases not belonging to the labour force (153 persons) and those who lived outside Norway at the time of the survey (287 persons). The remaining sample (2784) is described in Table A.1. The sample was drawn from the national education register of Statistics Norway which compiles information on Norwegian education and education among immigrants residing in Norway. The sample of Norwegians graduated abroad was drawn from the State Educational Loan Fund data register. Most abroad graduates are included in this register (Wiers-Jenssen, 2003). The survey comprises college and university graduates from Norwegian and foreign HEIs within most higher level (master degree) studies and selected lower degree (bachelor degree) studies. The respondents graduated during The sample was stratified by type of education, 2 immigrant status and origin of education (whether the diploma was foreign or Norwegian). Immigrants and graduates from HEIs abroad were over-represented in the sample. In the regression analyses weightings were not used because all the stratifying variables are used as control variables. However, in tables showing mean distributions, both unweighted and weighted estimates are shown. The data is weighted mainly in order to correct for the over- and under-representation according to the stratifying sampling procedure, and also for differences in response rate between the groups. The overall response rate was 50 per cent, 3 varying between the groups. Among ethnic Norwegians graduated in Norway the response rate was 61 per cent and among ethnic Norwegians graduated abroad,47 per cent. Among immigrants it was 42 per cent. 9

10 Method, Variables and Descriptives The dependent variable has three outcomes: unemployment, over-qualification and relevant employment. Multinomial logistic regression models are used to analyze the probability of being unemployed or being overqualified relative to holding relevant work. Unemployment is measured among respondents in the labour force who reported unemployment at the time of the survey. Over-qualified persons were employed at the time of the survey holding a job that did not require higher education, or a job that required higher education at a lower level than the educational level they had attained. The definition of over-qualification is based on the respondents self-assessment. 4 The rest have relevant work. The uncontrolled distribution of the dependent variable is shown in Table 1. (Table 1 about here) In Table 1, the respondents are categorized according to the origin of the education and the origin of the graduates. Origin of education is treated dichotomously, according to origin of diploma. Immigrants are born outside Norway and both parents are also born outside Norway; that is first generation immigrants. (The number of second generation immigrants, born in Norway with parents born abroad, is very low and are treated as non-immigrants in the analyses.) The immigrants are further categorised according to whether they have Nordic, Western (else) or non-western background. Western background refers to Western Europe (excluding the Nordic countries), North America and Oceania (Australia, New Zealand), non-western the rest of the world. Those who are not immigrants (born in Norway) are labelled ethnic Norwegians, alternatively non-immigrants. 10

11 Table 1 shows that among the ethnic Norwegians those with a diploma from abroad are more frequently unemployed or overqualified than those with a diploma from a Norwegian HEI. Among the Nordic immigrants there are minor differences according to the origin of diploma. Among the Western immigrants those graduated outside Norway more frequently seem to be over-qualified for their job than those who graduated in Norway. The latter tendency is more outspoken among the non-western immigrants. However, there seems to be no difference regarding the risk of being unemployed among the non-western immigrants graduating in Norway and those who graduate outside Norway. Overall, the unemployment rate is highest among the non-western immigrants regardless of origin of diploma. Independent variables. Several factors may have influenced the results shown in Table 1. With reference to the theories sketched above, the following variables are included in the analyses: 1) Human capital variables like field of study, education level and grades; 2) The origin of diploma serving as a proxy for country specific human capital; 3) Proficiency in Norwegian serving as both social and human capital related variable; 4) Residential time in Norway and parental education level (at least one of the parents have higher education) serving as proxies for social capital; 5) Other control variables such as gender, age, and graduation year. Dummy variables for graduation year are included as proxies for labour market specific conditions. The distribution of graduates according to type of education varies widely between immigrants, persons graduated abroad and ethnic Norwegians graduated in Norway (see Table A.1). Hence; the control for type of education is very important. Grades are measured as academic performance, relative to co-students, based on the graduates rating. The scale varies between 1 and 5, 1 being the best ( clearly better than the average ). Since this is a 11

12 way of standardization of grades, no other standardization of this grade level is needed. Missing values are set equal to the mean value. Length of residential period in Norway. Indicators of the duration of residence time (long, medium or short) in Norway are established as dummy variables. Those with long residence time had moved to Norway before At the time of the survey the group with long residence time had lived in Norway for at least 15 years. Medium duration residence time comprises those who had moved to Norway during the period They had been living in Norway 9 14 years at the time of the survey (5 10 years when graduating). Those with short residence time had been living in Norway for less than 9 years at the time of the survey. Proficiency in Norwegian. Immigrants were asked to assess their oral and writing skills in Norwegian on a five-point scale. They were also asked if they occasionally encountered problems with the Norwegian language at work, at home, in social contexts or when they read Norwegian newspapers. Only a few reported having poor language skills. This was expected, given that all had higher education, none of the immigrants had arrived recently in Norway and most of the non-western immigrants had graduated in Norway. In the analyses a distinction is made we distinguish between those with self-reported good skills and the rest. A dummy variable based on the answers of the questions referred to above was created to be included as a control variable. Those with the highest and second highest scores on the fivepoint scale, both in oral and writing skills, and who did not report any large problems with the Norwegian language on any of the mentioned items, were considered as having good proficiency in Norwegian. 12

13 Results Table 2 shows the results of multinomial regression model controlling for human capital related variables, demographic variables and year of graduation. (Table 2 about here) Ethnic Norwegians graduating abroad and non-western immigrants (regardless of country of graduation), have a higher risk of being unemployed than Norwegians graduating domestically. The interaction term of having non-western background and having graduated abroad is not significant. This indicates that it is the fact of having non-western background that is of significance concerning risk of unemployment. Concerning the risk of overqualification, both ethnic Norwegians graduating abroad and non-western immigrants especially those graduating abroad have a higher risk of over-qualification than ethnic Norwegians graduating in Norway. There are no significant effects of being a Nordic immigrant. Western immigrants graduated in Norway have an extremely low risk of being unemployed (none in this group are unemployed in our study 5 ). In the Western group there is also a clear tendency that those graduating in Norway have a lower risk of over-qualification than those graduating outside Norway. There is also a tendency among the Nordic immigrants that graduating abroad increases the risk of being over-qualified for the job, though this is not statistically significant. The differences in the probability of experiencing mismatch are illustrated in Figure 1. 6 The estimates are based upon data in Table 2, and refer to a male graduate with average age and 13

14 grades for the sample, educated in Business Administration in The estimates refer to ethnic Norwegians and non-western immigrants graduated in Norway or abroad respectively. (Figure 1 about here) Figure 1 illustrates that graduating abroad increases the risk of being mismatched in both groups. Among those graduating in Norway the non-western immigrants have a higher risk of being unemployed or over-qualified for their present job compared to ethnic Norwegians. The analyses in Table 2 did not include control for social capital-related variables. However, such variables are included in Table 3. (Table 3 about here). Model 1 (Table 3) includes control for proficiency in the Norwegian language and parents educational level. Model 2 includes control for residence time in Norway for the non-western immigrants and the Western group (here including the Nordic immigrants) respectively. Model 3 includes both control for proficiency in Norwegian, duration of residence and parents education level. Proficiency in the Norwegian language has no major impact on the effects of immigrant variables. Parents education level has no significant effect. However, when also including control for residence time (cf. Model 3), having highly educated parents decreases the unemployment risk. The effect of proficiency in Norwegian is contrary to what was expected. It has no significance for the unemployment risk, neither for the Western nor for the non- 14

15 Western immigrants. Good proficiency in Norwegian seems to increase the probability of being over-qualified in the Western group (Model 1), but the effect is weakened after control for residence time (Model 3). This relationship is obviously spurious due to unobserved heterogeneity. The unemployment risk decreases inversely to duration of residence in Norway among the non-western immigrants. The risk of over-qualification among the non-western immigrants with long residence time in Norway is, however, almost as high among those with short residence time, while those with medium duration residence time did not have a significantly higher risk of over-qualification than ethnic Norwegians. This applies to both Models 2 and 3. The effect of proficiency in the Norwegian language is still non-significant after controlling for residence time (Model 3). However, the effects of duration of residence tend to increase after control for proficiency in the Norwegian language. Thus, residence time might have greater impact on the probability of being over-qualified among those with poor language proficiency than for the rest of the group. There are no significant effects of residence time on the unemployment risk for the Western immigrants; however, those with the longest residence time among the Western graduates have a lower risk of being over-qualified than ethnic Norwegians and Western immigrants with short residence time. Figure 2 shows the estimated results for male graduates in Science and Technology with a master s degree (based on Model 2 of Table 3). Further, the estimates refer to a graduate with average age and grades, graduating in The probability of mismatch is much lower for graduates in Science and technology than for those graduating in Business Administration; 15

16 that means that Figures 1 and 2 also show the difference between the two fields of study (cf. the estimates for the non-immigrants). (Figure 2 about here). Figure 2 displays that the probability of holding relevant work among non-western immigrants is highest among those with medium residence time. The reason is that this group has a lower risk of over-qualification than those with long residence time; the unemployment risk is somewhat higher than for those with long residence time. Non-Western immigrants with short residence time have the highest risk of both unemployment and over-qualification. Discussion Mobile students: Entrance barriers Ethnic Norwegians graduated abroad have a higher probability of being unemployed as well as being over-qualified. However, the differences are not dramatic. The graduates are in an early stage of their career, and it may take some time to overcome some of the barriers at the entrance to the labour market. Other analyses of Norwegians graduates have shown that those with diploma from abroad on average have higher wages and are more likely to have jobs with an international profile (Wiers-Jenssen 2008a, b). These positive effects may counterbalance the negative outcomes investigated here. A recent study among Norwegians who have studied abroad shows that relatively few have experienced negative attitudes among Norwegian employers, but that a majority think that employers lack knowledge of HE from abroad (Wiers-Jenssen 2008b). 16

17 Immigrants no effect of proficiency in Norwegian and large effect of residence time. The results regarding residence time in Norway and proficiency in the Norwegian language require closer examination as they may appear to be contradictory. As mentioned, previous studies have shown that proficiency in the language of the immigration country correlates with residence time. 7 Why then, do we find effects of residence time, but no effect of proficiency in the Norwegian language? One possibility is that some respondents may have overestimated their language proficiency, and that some, for instance among the Nordic immigrants, have underestimated their skills. 8 Another possibility is that those with long residence time have better contacts and posses a higher country-specific or country-relevant cultural and social capital from which they benefit, apparently irrespective of their language proficiency. A third possibility is that in some segments of the labour market (for persons with higher education) proficiency in the Norwegian language is not decisive for employment opportunity. This implies that a somewhat different mechanism exists in the Norwegian labour market than was found by Chiswick and Miller (2003) as mentioned earlier. In parts of the Norwegian labour market, language proficiency, particularly in English, may compensate for lack of skills in Norwegian. This may also be important in explaining why Western immigrants face a low unemployment risk regardless of both length of residence and proficiency in the Norwegian language. Immigrants - Choice between unemployment and over-qualification? The findings concerning the effects of the length of residence time in Norway differ with regard to the risk of unemployment versus the risk of being over-qualified for the job. The results point in the direction of choice between unemployment and over-qualification for a number of the graduates. Among the non-western immigrants with a long residence time in Norway for some reason we do not know there may have existed a higher inclination than among those 17

18 with medium duration of residence to accept a job offer that implies over-qualification, instead of risking further unemployment. If this is the case, this could be a result of special negative labour market experiences in this group over a longer period than was the case for the group whose residence in Norway was of shorter duration. Another finding also gives support to an assumption that over-qualification and unemployment partly is a result of different adaptations to the labour market. This is the effect of academic performance which does not have an effect on the unemployment risk although it does have a significant (yet small) effect on the probability of over-qualification in the present job (cf. Table 2). This indicates that some of the respondents may have lowered their expectations to the job in accordance with their grade level from higher education, and after having experienced difficulties in obtaining a (relevant) job. The phenomenon of choice may also be the case for some Western immigrants. Those graduating abroad have an increased risk of being over-qualified compared to those graduated in Norway. Otherwise, the factors that affect the probability of being over-qualified seem to be essentially the same as the factors affecting the risk of unemployment. Some of the educational categories with a high risk of unemployment also have a high probability of being overqualified. Moreover, ethnic Norwegians with a diploma from abroad, as well as non-western immigrants, have a higher risk of both unemployment and over-qualification. This indicates that the results cannot simply be interpreted as a situational choice between unemployment and over-qualification depending on the reservation wage. Rather, ongoing problems for some groups in getting a job may increase the willingness to accept a job offer that does not correspond to the educational level. 18

19 Conclusions The results of the analyses only partly support the six hypotheses presented in the introduction. Referring to Hypothesis 1 (higher unemployment rates among those graduated abroad), it is confirmed that both ethnic Norwegians and non-western immigrants graduated abroad had a higher unemployment risk than ethnic Norwegians graduated domestically. However, this was not the case for the Nordic or Western immigrants. Neither was it found that the unemployment risk among non-western immigrants graduated in Norway was lower than among non-western immigrants graduated abroad, as suggested in Hypothesis 2. Non-Western immigrants graduated in Norway had a lower risk of over-qualification than non-western immigrants graduated abroad, but higher than ethnic Norwegians graduated in Norway, in line with Hypothesis 3. Hypothesis 4, also concerning higher risk of over-qualification for those graduated abroad, was partly confirmed. Both ethnic Norwegians graduated abroad and non-western immigrants graduated abroad had a higher risk of over-qualification than ethnic Norwegians graduated domestically, but this did not apply to the Nordic immigrants (possibly due to high standard errors caused by the restricted number of observations). Among the Western immigrants graduated abroad there was not an increased risk of being over-qualified relative to ethnic Norwegians, but the risk of over-qualification among the Western immigrants graduated abroad was increased relative to those in the same group graduating in Norway. The results indicate that the education from abroad has not been perfectly transferable to the Norwegian labour market. The same reasoning may be applied to the ethnic Norwegians graduated abroad, and even more so, to the non-western immigrants. The revealed differences may be partly due to the question of country-specific human capital; to a lack of social 19

20 capital/relevant contacts; to uncertainty among the employers and possibly also to statistical discrimination. Non-Western immigrants graduated abroad had the highest risk of over-qualification of all the groups. This indicates that statistical or other forms of discrimination are important factors contributing to explaining the results for this group in particular. This might be due to a greater uncertainty among employers about diplomas with a non-western origin and to a more widespread statistical (or other forms of) discrimination towards the non-western group. The latter may be seen in the light of the fact that also among non-western immigrants graduated in Norway the risk of over-qualification is high, and that the unemployment risk is highest for the non-western group regardless of the origin of their diploma. Referring to Hypothesis 5 (longer residence time lowers the risk of unemployment and skills mismatch for immigrants), findings are only partly supportive The immigrants residential duration in Norway is of particular importance, but this mainly applies to the non-western immigrants. The longer the non-western immigrant has resided in Norway the lower is the unemployment risk. However, the risk of over-qualification is lowest among those with medium residence duration. This indicates that some job-seekers chose to remain unemployed rather than to take a job for which they were clearly over-qualified. Hypothesis 6, suggesting that immigrants with a high language proficiency would have a lower risk for unemployment and over-qualification, was not confirmed. The missing effect of language proficiency further supports the assumption of the existence of preference or statistical discrimination mentioned above. 20

21 Overall, the results show that graduates with diplomas from abroad and non-western immigrants are at some disadvantage in the competition for jobs in general, and jobs relevant to their qualifications in particular, after controlling for general human capital variables. The analyses have shown that the explanations can be partly found in both theories of social capital and country-specific human capital (disadvantages on the supply side), as well as theories of discrimination (lack of acknowledgement of their education or lack of knowledge, on the demand side). The results indicate that there is limited awareness among employers about recruiting graduates with an untraditional background. This does not necessarily result in hiring the best graduate, so also from the employers perspective there should be a need for more diversity in the recruitment strategy. 21

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27 Table 1 Labour market match or mismatch at the time of the survey (3 ½ 5 years after graduation), by immigrant background among non-mobile and mobile students. Weighted estimates in parentheses. Non-immigrants Nordic immigrants Western Non-Western Unemployed Overqualified Relevant work Grad. in Norway 1.0 (1.2) 16.8 (15.5) 82.2 (83.4) Grad. abroad 2.6 (2.9) 21.0 (22.3) 76.4 (74.8) Grad. in Norway 1.4 (0) 18.8 (20.8) 79.7 (79.2) Grad. abroad 0.6 (0) 20.8 (23.6) 78.6 (76.4) immigrants Grad. in Norway 0.0 (0) 13.8 (13.0) 86.2 (87.0) Grad. abroad 1.3 (0) 17.1 (19.2) 81.6 (80.8) immigrants Grad. in Norway 7.1 (9.1) 21.4 (19.5) 71.4 (71.4) Grad. abroad 6.2 (4.3) 38.5 (39.1) 55.4 (56.5) Total 1.9 (1.5) 18.9 (16.6) 79.2 (81.9) Number of observations Table 2 Multinomial logistic regression predicting labour market mismatch 3 ½ -5 years after graduation. Reference category: Science and technology, master degree; ethnic Norwegians; male; graduated in Norway; graduation year=1997. Unemployed versus relevant work Over-qualified versus relevant work B S. E. B S. E. Intercept Non-immigrant, graduated abroad Nordic immigrant Nordic immigrant * graduated abroad Western immigrant Western immigrant * graduated abroad Non-western immigrant Non-western * graduated abroad Business and Administration Social Sciences, master degree Psychology, master degree Humanities, master degree Arts Medicine, health and welfare, master degree Health and welfare, bachelor degree Engineering, bachelor degree Other, unspecified Academic performance when graduating, relative to co-students Female Age Age 2 / Year of graduation Year of graduation Pseudo R 2 (Nagelkerke) Number of observations 2783 Note: When the coefficient is in bold type and not in italics, the coefficient is significant at level p<0.05. When the coefficient is in bold type and in italics, the coefficient is significant at level p<

28 Table 3 Multinomial logistic regression predicting labour market mismatch controlling for i. a. social capital related variables. Reference category: Science and technology, master degree; ethnic Norwegians; male; graduated in Norway; graduation year=1997. N= Unemployed versus relevant work Over-qualified versus relevant work B S. E. B S. E. Model 1 Intercept Non-immigrant, graduated abroad Nordic immigrant Nordic immigrant * graduated abroad Western immigrant Western immigrant * graduated abroad Non-Western immigrant Non-Western* graduated abroad Good proficiency in Norwegian * non-western Good proficiency in Norwegian * Western Parents higher education (Field of study, gender, age, grades, graduation year included) Pseudo R 2 (Nagelkerke) Model 2 Intercept Non-immigrant, graduated abroad Long residence time in Norway * non-western Medium res. time in Norway * non- Western Short res. time in Norway * non- Western Long or medium residence time, Western immigrants Short residence time, Western (Field of study, gender, age, grades, graduation year included) Pseudo R 2 (Nagelkerke) Model 3 Intercept Non-immigrant, graduated abroad Long residence time in Norway * non-western Medium res. time in Norway * non- Western Short res. time in Norway * non- Western immigrants Long or medium residence time, Western Short residence time, Western Good proficiency in Norwegian * non-western Good proficiency in Norwegian * Western Parents higher education (Field of study, gender, age, grades, graduation year included) Pseudo R 2 (Nagelkerke) See note below Table 2. 2 Long and medium residence time is lumped together for the Western group due to limited number of observations with long residence time in this group. 28

29 Figure 1 Estimated probability of experiencing unemployment, over-qualification or relevant work five years after graduation among persons in the labour force. Graduates in Business and administration. 100 % 80 % 1,7 25,7 5,5 33,3 8,8 8,2 31,4 Unemployed 60 % 47,8 Overqualified 40 % 72,6 Relevant work 61,2 59,9 20 % 44,0 0 % Graduated in Norway Graduated abroad Graduated in Norway Graduated abroad Non-immigrant Non-Western immigrant Figure 2 Estimated probability of experiencing unemployment, over-qualification or relevant work five years after graduation among persons in the labour force, by residence time in Norway. Graduates in Science and Technology, master degree. 100 % 0,5 1,8 0,9 2,3 5,8 80 % 19,3 26,9 34,8 21,9 37,2 Unemployed 60 % Over-qualified 40 % 80,2 71,4 64,3 75,9 57,1 Relevant work 20 % 0 % Graduated in Norway Graduated abroad Long residence time Medium residence time Short residence time Non-immigrant Non-Western immigrant 29