Labour market outcomes of higher education undertaken abroad

Abstract

The aim of this article is to analyse the transferability of higher education undertaken abroad to a domestic labour market. More specifically, how do Norwegians who have undertaken their education abroad cope on the labour market compared to those who have a corresponding education from Norway? To examine this, we analyse short‐term labour market careers among graduates. Three measures of labour market outcome are investigated: job probability, skill mismatch and wages. Results show that education undertaken abroad has both positive and negative effects on labour market outcome. Graduates with a foreign degree have a lower job probability and a higher risk of over‐education relative to home graduates. But among the employed, ‘abroad’ graduates have higher wages. The latter is explained partly by more abroad graduates than home graduates being employed in the private sector. Highest job probabilities are found among those who have parts of their education from abroad. The main results are significant and robust across models, but the quantitative differences in labour market outcomes between abroad and home graduates are relatively small.