Foreign-Born Workers Are Often Overqualified

Published on: January 22, 2019 / Update from: January 22, 2019 - Author: Konrad Wolfenstein

Organization for Economic Co-operation and Development

In many industrialized countries, a significant proportion of workers are overqualified for their jobs. The problem has become increasingly common in recent years, most notably in economies with competitive labor markets. While it can of course lead to positive effects for some companies, such as educating an employee to a higher level, it can also lead to higher salary expectations, lower levels of satisfaction and a higher likelihood that an individual will leave their job. The OECD definition of the overqualification rate is the proportion of highly qualified people working in an occupation that is classified ISCO

More than a third of high-skilled immigrants in OECD countries are overqualified for their jobs, although the exact rate varies greatly from country to country. With the exception of Portugal, this proportion is particularly high across southern Europe, where many highly skilled migrants have low and medium qualifications. This divide is not only defined by southern Europe, as the following infographic shows.

Greece (60.7 percent), Spain (53.6 percent) and Italy (51.7 percent) are notable examples of southern European countries where the foreign-born population has a far higher overeducation rate than the native population, whose share is 32 percent, 36.9 percent and 16.9 percent respectively. South Korea has the highest rate of overeducation among its domestic workforce, and even more interestingly, the foreign-born population has an even higher rate of overeducation at 74.5 percent. In the United States and Mexico, native-born and foreign-born workers are equally likely to be too qualified for their jobs.

In many developed countries, a considerable share of workers are overqualified for their jobs. The issue has become increasingly common in recent years, most evident in economies with competitive job markets. While it can of course result in positive effects for some organizations such as an employee performing at a higher level, it can also result in higher salary expectations, a lower level of satisfaction and a higher chance of a person leaving their job. The OECD definition of the overqualification rate is the share of the highly educated who are working in a job that is ISCO -classified as low or medium skilled.

Over a third of highly educated immigrants in employment across OECD countries are overqualified for their jobs with the exact rate differing significantly between countries. Excluding Portugal, that share is particularly high across Southern Europe where many highly educated migrants are in low and medium-skilled jobs. That disparity isn't just defined to Southern Europe as the following infographic shows.

Greece (60.7 percent), Spain (53.6 percent) and Italy (51.7 percent) are notable examples of Southern European countries where the foreign-born population has a far higher overqualification rate than the native-born population where the share is 32 percent, 36.9 percent and 16.9 percent respectively. South Korea has the highest share of overqualification among a native-born workforce and even more interestingly, its foreign-born population has an even greater share of overqualification at 74.5 percent. In the US and Mexico, native and foreign-born workers are equally likely to be too skilled for their jobs.

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