Does immigration policy affect the education--occupation mismatch? Evidence from Australia

Abstract

This article analyses the impact of a change in Australia’s immigration policy, introduced on 1 July 1999, on migrants’ probability of being over- or under-educated or correctly matched. The policy change consists of stricter entry requirements about age, language ability, education, and work experience. The results indicate that those who entered under more stringent conditions, the second cohort, have a lower probability to be over-educated and a correspondingly higher probability of being better matched than those in the first cohort. The policy change appears to have reduced the incidence of over-education among women, enhanced the relevance of being educated in Australia to being correctly matched, and has attracted a higher proportion of immigrants who were already under-utilised (or over-achieving) in their home countries. Overall, the policy appears to have brought immigrants that reduced the education mismatch in Australia’s labour market.