IMMIGRANT wages in Australian labour market: the role of different sources of human capital

Xie, Jiexin (2010). IMMIGRANT wages in Australian labour market: the role of different sources of human capital Honours Thesis, School of Economics, The University of Queensland.

       
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Author Xie, Jiexin
Thesis Title IMMIGRANT wages in Australian labour market: the role of different sources of human capital
School, Centre or Institute School of Economics
Institution The University of Queensland
Publication date 2010
Thesis type Honours Thesis
Supervisor Dr Gareth Leeves
Total pages 111
Language eng
Subjects 910107 Macro Labour Market Issues
140211 Labour Economics
910202 Human Capital Issues
Formatted abstract

This thesis examines the role played by different sources of human capital in the wage determination of immigrants in the Australian labour market. Of particular interest is the impact of human capital acquired in home countries and Australia, and effective (working) experience and idle (non-working) years. Mincer type wage equations are used and the Heckman procedure is used to correct for selection bias. Modelling is also undertaken to examine wage determination for immigrants from different geographical areas of origin and those arriving in different cohorts. Results show that immigrants' returns to years of schooling and labour market experience, both in Australia and in their home country, are lower than Australians' returns. The positive and significant returns to human capital obtained in Australia support the existence of strong wage progression after migration, while foreign human capital offers lower marginal returns, indicating that its' transferability to the Australian labour market is limited. Both immigrant males and females appear to have lower returns to each component of human capital than Australian workers. However, for immigrants from English speaking countries, their schooling obtained from home country has a greater wage effect than schooling obtained from Australia. For immigrants from other regions such as North and South Asia the returns to Australian human capital are significantly higher than returns to home country human capital. By analysing cohort effects for immigrants from different areas of origin and for males and females separately, we found that the cohort quality changes for each immigrant group are distinct. There was no significant improvement in cohort quality over time for immigrants from English-speaking countries but there was significant improvement for immigrants from North and South Asia, especially in the last few years. This latter effect is attributed to the changes in migration policy and the tightening of eligibility criteria.

Keyword Macroeconomics
Human capital

 
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