Do High-Skilled Immigrants Fi Nd Jobs Faster Than Low-Skilled Immigrants?

This paper investigates the role that pre-immigration skills play in immigrants job-finding processes in Germany. We first show theoretically that the job-finding rate for the high-skilled varies depending on their search strategy: if they are prepared to look for both unskilled as well as skilled jobs (cross-skill matching), then their expected time to find a job is lower compared to the low-skilled. However, if the high-skilled are only prepared to look for and take up skilled jobs (ex post segmented matching), it might be that the high-skilled actually need longer to find a job. We then provide empirical evidence by studying the labour-market integration process of Ethnic Germans, one of the largest immigration groups in Germany, using novel German administrative data. Applying proportional hazard models, our estimates generally support the theoretical predictions: in case of cross-skill matching, the job-finding rate of the high- and low-skilled does not differ significantly. However, if the length of time a job match holds is accounted for, then we do find that the high-skilled are significantly faster than the low-skilled. If the high-skilled only search for skilled jobs the likelihood of finding a job is about 50% lower compared to the low-skilled. By looking at the immigration process of Ethnic Germans, we provide evidence how the new legislation to improve recognition of foreign educational degrees in Germany introduced in 2012 might affect the transferability of pre-migration skills in the job-finding process, in particular of current European high-skilled immigrants.