Portability of Human Capital and Immigrant Overeducation in Spain

Abstract

The literature on immigrant assimilation highlights the imperfect portability of the human capital acquired by immigrants in their country of origin, which accounts for their low levels of labor market integration upon arrival in the new country, as well as their initially wide earnings gap. Recent studies have examined this issue from the perspective of overeducation. This study analyzes the portability of immigrants’ human capital into the Spanish job market according to their geographic origin. Spain’s immigrants originate from a highly varied range of countries, with origins as diverse as Latin America, the Maghreb, and Eastern Europe. Here, the use of public microdata files from the Spanish Census permits us to identify up to six regions of immigrant origin comprising developed countries and developing economies, distinguishing, furthermore, different regions of origin on the basis of their language and level of development. The results obtained indicate differing degrees of transferability of human capital depending on geographic origin, with transferability being greater for immigrants from countries that are highly developed or which have a similar culture or language and lower for those from developing countries and with more distant cultures. As an immigrant’s period of residence in Spain is prolonged, integration does take place but the pace is slow (between 7 and 9 years).