Mal-Employment Problems Among College-Educated Immigrants in the United States

This is the fifth paper in a series of papers that examines labor market underutilization problems experienced by college-educated immigrants who earned college degrees outside the United States compared with their counterparts who earned college degrees from colleges and universities located in the United States. Labor market underutilization can occur in several ways and this series of papers examines the four key ways in which underutilization can occur in American labor markets.

This paper examines the extent of underutilization that occurs among employed immigrants in the form of mal-employment. Mal-employment occurs when college graduates are employed in occupations in which they do not use the knowledge, skills, and abilities that typically are developed through a college education. For example, college graduates waiting tables or working as receptionists or retail salespersons are mal-employed. College-educated immigrants who are mal-employed do not utilize to the fullest extent the human capital they acquired with their college education and so have annual earnings sharply below their counterparts employed in college labor market (CLM) occupations. Understanding the extent of mal-employment among different groups of college-educated immigrants, particularly among those with foreign college degrees, can provide important insights to guide policies targeted toward reducing barriers to the full integration of college-educated immigrants into American labor markets.

Findings in this paper reveal that one in four college graduates who were born abroad were mal-employed in October 2003. Male college-educated immigrants were somewhat less likely to be mal-employed than were female college-educated immigrants (24% versus 29%). Gaps in mal-employment rates were not large by most demographic traits of immigrants—marital status, presence of children, or school enrollment status. The only exception was disability status—immigrants with disabilities were considerably more likely to be mal-employed than were those without disabilities (38% versus 25%). Mal-employment rates among college-educated immigrants were sharply lower among those with higher levels of college education—varying from 36 percent among those with only bachelor’s degrees and 16 percent among those with master’s degrees to 9 percent and 6 percent, respectively, among those with professional or doctorate degrees. The fields in which immigrants had earned their most recent college degrees were associated with different rates of mal-employment, ranging from just 11 percent among computer and information science graduates to 35 percent among those with college degrees in language, arts, and communication fields.

The prevalence of mal-employment also varied by immigrant-specific traits, such as English language proficiency, type of entry visa, and year of entry to the United States. Better English language proficiency was associated with lower mal-employment rates. College-educated immigrants who entered the United States with work or student visas were considerably less likely to be mal-employed than were immigrants with dependent visas, other types of temporary visas, or those who had entered the United States with green cards. Immigrants who enter the United States with work visas arrive in this country with a direct and explicit connection to employers and have jobs of their choice waiting for them. Unsurprisingly, those entering the United States with work visas are less likely to work in occupations outside the college labor market. College graduate immigrants who entered the United States with student visas most often enter the U.S labor market with college degrees from American colleges or universities and are, therefore, less likely to be mal-employed. In addition, immigrants who had arrived to the United States more recently were modestly more likely to be mal-employed than were established immigrants who had had a longer time to assimilate into U.S. labor markets.

The main focus of this paper is the variation in mal-employment by country or region where immigrant college graduates earned their college degrees. Immigrant college graduates who had earned their college degrees abroad were two times as likely to be mal-employed as those who had earned their college credentials in the United States (36% versus 18%). Immigrants with Filipino, African, or Latin American college degrees had the highest rates of mal-employment?50, 47, and 46 percent, respectively. Immigrants with college degrees from Asia (excluding India, China, and the Philippines) and Europe (excluding the UK and Northern Ireland) had mal-employment rates of 40 percent and 35 percent, respectively, whereas Indian and Chinese college degrees were associated with mal-employment rates of 29 percent and 24 percent, respectively. In contrast, foreign-born college graduates with Canadian or British college degrees had a low incidence of mal-employment (14% and 17%, respectively). It was only immigrants with college degrees from these two countries that had lower rates of mal-employment than the 18 percent rate among those with U.S. college degrees.

Findings in this paper show that the labor market costs of mal-employment among immigrant college graduates are steep. On every labor market outcome measure, mal-employed immigrants were considerably worse off than their counterparts who had gained access to college labor market jobs. In 2003 (when the 2003 National Survey of College Graduates [NSCG] was administered), the mean annual earnings of mal-employed immigrants were $32,000, or 43 percent less than those of CLM-employed immigrant college graduates ($42,000 versus $74,000). Most of this differential is attributable to their lower hourly earnings. Mal-employed immigrants worked 141 (or 6%) fewer annual hours than did mal-employed immigrants, but their hourly earnings were nearly $16, or 40 percent lower than those of their CLM-employed counterparts. Part-time employment and involuntary part-time employment also were more common among mal-employed immigrants than among their CLM-employed counterparts.