Academic Literature

Over-education of Immigrants in Canada – A much higher likelihood of over-education than US peers

Canada and the United States are two major immigrant destinations with distinct immigration policies. The two countries also differ in immigration level and economy size, but their government structures, economic systems and social environment have many similarities. These similarities and differences provide a useful setting for comparative immigration research.

This study assesses the degree of over-education among university-educated immigrants in the United States and Canada. This study draws on comparable data from the 2014, 2015 and 2016 American Community Survey and the 2016 Canadian Census to calculate the over-education rate for immigrants and the native-born in each country. Over-education is defined as a worker’s education exceeding the level of education required to adequately perform a particular job. Three alternative approaches are used to measure over-education.

This study further investigates possible underlying factors of the differing over-education rates among immigrants to the United States and Canada. The analysis is based on the assumption that immigration policies interact with broader aspects of the destination labour market, which affects the economic performance of skilled immigrants. This study also explores immigrant selection mechanisms that can promote immigrant education–occupation match. This is accomplished by comparing the over-education rates of university-educated immigrants admitted under different admission categories in Canada (e.g., purely points-based versus a combination of employer selection and a points system).

The results show that university-educated recent immigrants to Canada had a much higher likelihood of over-education than their U.S. peers. The cross-country difference was less pronounced for long-term immigrants, and native-born Americans were even slightly more likely to be overeducated than native-born Canadians. While recent immigrants are more likely than the native-born to experience an education–occupation mismatch in both countries, the gap was much more pronounced in Canada than in the United States.

While labor market demand is associated with a lower level of over-education among recent immigrants in both countries, a greater supply of university-educated recent immigrants was positively associated with over-education in Canada, but this was not the case for the United States. These results likely suggest that a larger supply of university-educated immigrants in a smaller economy reduces a country’s ability to absorb immigrants. A smaller supply and a larger demand, combined with an employment-based immigration selection system for skilled immigrants in the United States likely balance immigrant supply with domestic labour market demand more effectively.

Within Canada, the over-education rate was significantly lower for immigrants selected through the Canadian Experience Class (CEC) than for those selected under the Federal Skilled Worker Program (FSWP). Provincial Nominee Program (PNP) immigrants had a higher over-education rate than FSWP immigrants. Although both the CEC and PNP resemble employer selection mechanisms, the CEC selects skilled workers while the PNP admits many lower-skilled workers.

Table Over-education among workers with at least a bachelor’s degree, aged 25 to 64, United States (2014 to 2016) and Canada (2016)
Chosen excerpts by Job Market Monitor. Read the whole story @ Over-education Among University-educated Immigrants in Canada and the United States


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