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

Abstract

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.