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It is well established that workers with more years of education earn higher wages. By establishing a reference or "required" level of education for a worker's occupation, it is possible to decompose an individual's actual level of education into years of required education and years of over-education or under-education relative to that occupational norm. A richer picture of wage determination can be gained by substituting these three terms for actual education in the standard Mincer wage equation. Relative to the standard estimates of returns from years of actual education, international and Australian studies using this "ORU model" ("over"-education, "required" education, "under"-education) typically find larger returns from years of required education and modest returns from years of over-education. Workers benefit from being employed in an occupation for which they are under-educated, because the positive effect of being in an occupation with a higher reference level of education outweighs the negative effect of their years of under-education. This report shows how the ORU model can be used to inform consideration of the wage implications of credentialism, defined as an increase over time in the education standards for specific jobs and which is not necessary for the effective achievement of tasks across positions in the labour market. Data from the 2006 Census of Population and Housing are used to establish the required (mean) level of education in each of 46 two-digit occupations for a sample of employees from waves 1 to 8 of the Household, Income and Labour Dynamics in Australia (HILDA) Survey. Both standard ordinary least squares (OLS) and panel data models show that the estimated return from years of required education exceeds the return from years of surplus education. This result is robust to the augmentation of the ORU model with variables for the occupation of employment, and to estimation on separate samples of males and females. The years of educational attainment attributable to credentialism are associated with an increase in the hourly wage of the same order of magnitude as the years of over-education in the standard ORU model. Under extreme versions of credentialism, where the level of education is used only to match individuals to jobs and where the skills that are valued in the labour market are only learned on the job, it would be expected that the credentialism wage effect would be zero. The fact that this return is not zero indicates that, even if the higher levels of schooling of our younger cohorts are not needed for them to be assigned to jobs, the skills learned at school are valued in the labour market. There are two key policy messages from this research. The first is that the additional years of schooling associated with credentialism are not wasted: these additional years appear to be linked to the development of skills that attract a reward of around 3-6%. This is comforting for advocates of the expansion of the education sector. Second, there are large gains that could be potentially achieved through a better matching of workers' actual educational attainment to job requirements. (Contains 14 tables, 1 figure, and 11 footnotes.)

This study of immigrant language skills used data from the Longitudinal Survey of Immigrants to Australia, which followed a cohort of settler arrivals for the first 3.5 years of their residence in Australia, surveying them at three points in time. The survey examined determinants of improvement in English language skills with time among immigrants from non-English speaking countries, focusing on economic incentives, exposure to the destination language, and efficiency in second language acquisition. Section 1 introduces the paper. Section 2 presents a model of dominant language skills. Section 3 outlines the survey. Section 4 presents basic cross-tabulations of English skills by region of birth. Section 5 contains econometric estimates of the model, focusing on the study of English speaking skills at various durations of residence in Australia. Section 6 analyzes the development of English speaking, reading, and writing skills based on a bivariate probit model. Section 7 concludes that there was improvement in destination language skills among immigrants with longer duration of residence. The model of language proficiency was robust across survey waves, types of language proficiency, and gender. (Contains 25 references.) (Adjunct ERIC Clearinghouse for ESL Literacy Education) (SM)

This study examines the impact of visa category on the English language skills of recent immigrants to Australia, focusing on the extent to which immigration selection criteria have an impact on language skills and noting the extent to which this impact is over and above that attributable to age, skills, and behavioral factors. The study followed a cohort of recent arrivals to Australia, examining both visa category and variables derived. Immigrants were interviewed three times between 1993-95. Overall, immigrants' English speaking, reading, and writing skills varied across the visa categories, and they were considerably higher among skill-based immigrants shortly after immigration, followed by family-based visa recipients. Refugees had the lowest language proficiency. These differences disappeared 3.5 years after immigration for speaking skills, but they persisted for reading and writing skills. The variables generated from the model of destination language proficiency were in part predictions of visa category and were important statistically for explaining proficiency. The effects of some variables on language skills increased with duration, in particular, the efficacy variable, age, and gender, which may be reflecting differences in labor market attachment. (Contains 25 references.) (Adjunct ERIC Clearinghouse for ESL Literacy Education) (SM)

This study investigated the dominant language skill development of spouses within migrating units in Australia. It analyzed the English proficiency of a sample of principal applicant (PA) immigrants (immigrants upon whom the approval to immigrate is based) and their spouses, referred to as migrating unit spouses (MUSs). The study assessed whether the observed factors that influenced dominant language acquisition, such as educational attainment and age at migration, would be the same for PAs and MUSs. It also examined the role that correlation among unobserved factors for both spouses played in the development of spouses' language skills. Data came from administrative records on visa categories and from wave one of the Longitudinal Survey of Immigrants to Australia. Data analysis indicated that family mattered in the acquisition of dominant language skills. There was a high degree of correlation in the English speaking skills of partners in migrating units among recent immigrants to Australia. Children had a negative effect on their mothers' language proficiency but no effect on their fathers' language proficiency. (Contains 28 references.) (Adjunct ERIC Clearinghouse for ESL Literacy Education) (SM)

This paper analyzes the effects of language practice on earnings among adult male immigrants in Canada using data from the 1991 Census of Canada. It examines whether destination language skills are complements to or substitutes in generating earnings with respect to other kinds of human capital (schooling and pre- and post-migration labor market experience). Results show that earnings increase with schooling, pre-immigration experience, duration in Canada, and proficiency in the official languages (English and French). There is complementarity between language skills and both schooling and pre-immigration experience. Greater proficiency in the official languages enhances the effects on earnings of schooling and pre-immigration labor market experience. Language proficiency and post-migration experience appear to be substitutes, in that among people with greater language proficiency, the impact of time in Canada on earnings is smaller. (Contains 15 references.) (Adjunct ERIC Clearinghouse for ESL Literacy Education) (SM)

The determinants of dominant language fluency among immigrants and the labor market impact of this fluency are examined. The model is generally applicable, but the empirical tests are performed for adult foreign-born men in Australia (1981 and 1986 Australian censuses). The findings indicate that fluency responds to incentives, including economic incentives, and both the individual's exposure to and efficiency in acquiring dominant language skills. The analysis also shows that fluency enhances labor market earnings. Among immigrants from non-English speaking countries, those fluent in English had more than 9 percent higher earnings in 1986. Fluency is also shown to enhance the returns of other skills, including schooling and labor market experience. Two appendices present an analysis of the 1981 Australian census of population and housing, and descriptive statistics concerning adult foreign-born men. Contains 17 references. (LB)