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Foreign Qualification Recognition: An economic perspective

Foreign Qualification Recognition: An economic perspective. Arthur Sweetman Department of Economics (arthur.sweetman@mcmaster.ca). Selected Regulated Professions in Health Place of birth and location of highest study (%). Part of a broader issue: The portability of human capital.

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Foreign Qualification Recognition: An economic perspective

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  1. Foreign Qualification Recognition:An economic perspective Arthur Sweetman Department of Economics (arthur.sweetman@mcmaster.ca)

  2. Selected Regulated Professions in HealthPlace of birth and location of highest study (%)

  3. Part of a broader issue: The portability of human capital • Credentials • Not only formal high school/college/university qualifications • Not major source of well known long-term decline in immigrant earnings • Recognition is a “two way street” • Need bridging programs and the like to complement pre-migration in many cases • But, hard to “fill gaps”

  4. Not all internationally training suits Canadian requirements • Next slide: • Licensure examination pass rates for first time test takers (%)

  5. General labour market experience • Reflects value of occupational/industrial/firm human capital • FOR THE CANADIAN BORN • At least as important as credentials for earnings • FOR IMMIGRANTS • Essentially zero or even negative economic rate of return to pre-migration experience • “Flip side” is penalty to increasing age-at-immigration • Very large return to Canadian experience • But, esp. important for skilled trades and other employment where “uncertified” on-the-job learning is prominent

  6. Language skills • Probably the most important predictor(s) of labour market success • Together with age-at-immigration, where less experience is better • Not easily developed without formal education/training • In general, literacy increases with schooling, but not with general labour market experience or age • In fact, literacy appears to decline with increasing years since graduation

  7. Focusing on Regulated Professions • In medicine, in non-systematic survey, Sharieff and Zakus (2006) observe that language testing is more of a hurdle than medical licensing/entry exams

  8. Interactions of Skills • Substantial evidence that we cannot view credentials in isolation from other skills • Especially, language skills mediate the economic value of education • Not new, but worth reiterating

  9. Ferrer, Green and Riddell (2006) • English/French literacy among immigrants is lower than that among the Canadian born • Both receive the same rate of return to literacy • Further, “the standard result that immigrants’ return to a university education acquired before migration is lower than native-born returns to a host country-acquired university education is eliminated once we control for literacy.” (p. 408) • Gap in literacy explains about 2/3 of immigrant earnings disadvantage among university educated • Less important for those with less than university • Literacy has no impact of return to experience

  10. Goldmann, Sweetman and Warman (2011) • Effectively no return to pre-migration education (in medium term) without either • English/French language skills OR • Pre- and post-migration occupational match • If have both then added benefit (interaction effect) • Earnings and the rate of return to education are increasing with improved language skills

  11. Those who successfully match pre- and post-migration occupations obtain a large earnings boost • About the same for regulated and non-regulated occupations in (% terms) • However, even with a job match, there is no economic return to pre-migration labour market experience without language skills • Return to experience small even with language • Looking at those successfully employed in regulated/licensed occupations • Very similar patterns overall

  12. Points and labour market outcomes • Traditional points system is a “threshold” model, whereas proposed models are closer to “competitive” one • Outcomes improve across the entire points spectrum

  13. Points, annual earnings and employment Sweetman and Warman, 2013

  14. What does all of this tell us? • From an economic perspective, the new selection models appear to be well suited to prompting labour market outcomes at entry, and, much more importantly, in the medium and longer terms • Although some questions about value of pre-migration experience, only a short duration is required and criteria has functions in addition to serving as measure of human capital • A lot of this is concerns qualification recognition in the broadest sense

  15. Any Downside? • Maybe • The easier the system is for employers, the higher the likelihood of new immigrants being substitutes for, rather than compliments to, the existing workforce • Most affected are those most like the new arrivals – typically recent arrivals • Hence, the LMO becomes an increasingly important tool in preventing adverse events in the selection process

  16. Overall • Credential recognition appears to be being facilitated, and favourable labour market outcomes supported • But, careful (and public/transparent) monitoring is required • Not only for outcomes of new immigrants, but impacts on others in society (although this last is hard and methodologically controversial)

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