Effects of Foreign Education on Immigrant Earnings

Eric Fong, University of Toronto
Xingshan Cao, University of Toronto

The research reported here explores the effects of foreign education on earnings. Previously, most studies were based on indirect estimated information about foreign education, and documented the lower earnings of immigrants who had foreign education as compared to those who had domestic education. Using direct information obtained from respondents, this research goes beyond the existing studies by suggesting the discount effects of foreign education, consisting of endowment and sheepskin discounts. Our results, as expected, show that the endowment discount on earnings is significant among immigrants who received their highest education in foreign countries. In addition, our results confirm our expectation that the place-specific sheepskin discount is found among those who completed universities in Asia.