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 theperspective of gender and nativity status, using Canadian census data. Mismatches arise whenindividuals are “over-educated” or “under-educated” relative to the normal levels of educationin their occupation of employment. We first estimate a multinomial logit to assess thelikelihood of educational mismatch, and examine the role gender, nativity status and, forforeign-born, language ability and length of residence in Canada, play in this regard. We thenestimate earnings functions, generalized to model educational mismatches, to estimate thecosts resulting from such mismatches, and to examine whether those costs vary across new andestablished foreign-born, and what role gender plays in this regard; also examined is thequestion of whether that penalty for foreign-born converges towards the same level as that ofnative-born, as the length of residence in Canada increases.