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Immigrants: highly educated, underpaid

Job-education mismatch hurts earnings of new Canadians, Concordia research proves
January 22, 2013
By Media Relations

The cab driver who was an engineer in his home country, the gas station attendant who used to teach physics, the cashier who trained as a pediatrician. New immigrants repeatedly find themselves in jobs for which their level of education outstrips the requirements, meaning a major loss for the Canadian economy.

In a paper recently published in the peer-reviewed open-access journal ISRN Economics, Mesbah Sharaf, an assistant professor in Concordia’s Department of Economics, found that two-thirds of recent immigrants to Canada possess more education than their jobs require. But time and effort can shift the numbers. Sharaf’s results show that increased proficiency in English or French, combined with post-immigration education and training, can significantly increase the likelihood of landing employment that matches qualifications.

Mesbah Sharaf, an assistant professor in Concordia’s Department of Economics | Photo credit: Concordia University

Using data from the most recent Longitudinal Survey of Immigrants to Canada, Sharaf measured job-education mismatch for new Canadians. He found that six months after their arrival, 76.3 per cent of men and 71.8 per cent of women have more education than their jobs require. Four years after arrival, the figures improve slightly, with 70.4 per cent of men and 64.6 of women over-educated for their jobs. In comparison, among Canadian-born workers, around 44 per cent are over-qualified for the work they do.

Sharaf explains that, “when searching for a job that matches their qualifications, new immigrants face barriers like lack of work experience and having few contacts in the Canadian labour market. They often don’t possess the necessary language skills and lack the social networks that could help in finding better jobs.”

Other reasons for the job-education mismatch include lack of recognition for foreign experience and credentials, costly accreditation and licensing requirements by professional associations, and poor source-country schooling quality. “As a result, many immigrants are left with no option other than survival jobs,” says Sharaf.

But there is reason for hope. Sharaf’s research proves that the incidence and intensity of over-education decrease with the length of an immigrant’s stay in Canada. “Alongside a social network that naturally widens as one spends more time in the new country, post-immigration education and training increase the likelihood of employment while reducing the probability of being over-educated,” Sharaf says.

The over-education problem translates to a loss of as much as $5 billion a year for the economy, according to the Conference Board of Canada. That’s because over-educated workers suffer from high job dissatisfaction, increased absenteeism, low productivity, poor health, job instability and low wages.

“This is a real problem for a country facing an ever-expanding deficit. It could really help the economy if the government directed resources toward closing the job-education gap for recent immigrants,” says Sharaf. “I hope that my findings will inspire new policies that will help immigrants integrate into the labour market.”

Related links:
•    Concordia’s Department of Economics
•    Cited study: "Mesbah Fathy Sharaf (2013). Job-Education Mismatch and Its Impact on the Earnings of Immigrants: Evidence from Recent Arrivals to Canada, ISRN Economics, vol 2013”

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