The Earnings of Foreign-Educated College Graduates: An Examination of the Determinants of the Hourly Earnings of College-Educated Immigrants

This is the first in a series of papers that examine the labor market underutilization problems experienced by immigrant workers with a college degree earned outside the United States. The research compares the job market activities and outcomes of immigrants with degrees from foreign colleges and universities to immigrants who have earned their degrees from an American university. This paper examines the level and variation in hourly earnings of different college educated demographic subgroups of immigrants with different kinds and levels of human capital.

The paper includes both a descriptive analysis of the hourly wages of college graduate immigrant workers including gender, age, marital status, country of birth, English language proficiency, and the characteristics of their college education including the type/level of degree, major field of study and region of world where the most recent degree was earned. The paper also includes findings from a multivariate regression analysis of the hourly earnings of employed college graduate immigrant workers.

Findings of this study reveal that, holding other factors constant, earning additional degrees beyond the bachelor’s degrees had a strong positive effect on hourly earnings of immigrants. Major field of study in which the degree was earned also exerted a strong influence on hourly wages. College educated immigrants with degrees in computer sciences and health and medical services as well as in engineering fields had the largest earnings advantages among all college majors analyzed. Stronger English language proficiencies were also positively connected to hourly wages.

Among the most important findings from the analysis is that immigrants with degrees from abroad have lower hourly earnings than their counterparts with similar degrees from U.S. colleges and universities. Only immigrants with degrees earned in the UK or Australia had hourly earnings that were not significantly lower than the earnings of immigrants with U.S. degrees. The earnings disadvantage for those who earned their degrees aboard were especially large for those with degrees from colleges in Central and South America, although the size of the earnings deficit were quite substantial for most employed immigrants with degrees earned from colleges located in most other regions of the world.