The incidence and costs of education-occupation mismatches in Canada: evidence from census data

Abstract

The incidence of educational mismatch and the costs resulting thereof, are examined from the perspective of gender and nativity status, using Canadian census data. Mismatches arise when individuals are “over-educated” or “under-educated” relative to the normal levels of education in their occupation of employment. We first estimate a multinomial logit to assess the likelihood of educational mismatch, and examine the role gender, nativity status and, for foreign-born, language ability and length of residence in Canada, play in this regard. We then estimate earnings functions, generalized to model educational mismatches, to estimate the costs resulting from such mismatches, and to examine whether those costs vary across new and established foreign-born, and what role gender plays in this regard; also examined is the question of whether that penalty for foreign-born converges towards the same level as that of native-born, as the length of residence in Canada increases.