WIIW The Vienna Institute for International Economic Studies - Wiener Institut für Internationale Wirtschaftsvergleiche

By Marina Tverdostup and Dora Walter

Migrants across Europe tend to earn less and are more likely to work in lower-quality jobs than native workers. But why? Are employers assigning them simpler tasks regardless of their abilities, or do genuine skill gaps persist even after migrants have found employment?

A new study by Marina Tverdostup of the Vienna Institute for International Economic Studies (wiiw) and Dora Walter of the University of Zagreb offers fresh insight into this question – with findings that carry important implications for integration policy across Europe.

Drawing on data from the latest wave of the Programme for the International Assessment of Adult Competencies (PIAAC Cycle 2, 2018-2023), covering eight European countries, the researchers compare immigrants and native workers who are employed in the same occupations and industries and perform the same types of tasks.

This ‘within-job’ approach is crucial, as it allows the authors to examine not only whether immigrants end up in lower-quality jobs, but also whether they are treated differently from native workers once they are in the same role.

Formal qualifications overstate how comparable skills really are

The study’s first striking finding concerns cognitive skills. Immigrants score 35-45 points lower than native workers in literacy and numeracy tests — a gap equivalent to 0.7 to 0.9 standard deviations and among the largest documented in international research.

Accounting for differences in age, gender and education explains only a small part of this disparity, closing around 14-19% of the gap. Even more revealing, placing immigrants in the same occupations and industries as native workers narrows it by just another 7%. In other words, even if occupational segregation were eliminated entirely, roughly 70-73% of the skills gap would remain.

This finding challenges a common assumption, namely, that equivalent qualifications signal comparable skills. In reality, immigrants with tertiary degrees score about 30 points lower than native graduates working in the same jobs. That difference amounts to more than half the proficiency gap observed among natives between someone who left school after primary education and someone with a master’s degree. In effect, formal qualifications appear to overstate how comparable skills really are across countries of origin and destination.

The gaps are not the same across all groups. Male immigrants face larger and more persistent disadvantages than female immigrants. Women migrants tend to be more positively selected and are more often employed in sectors, where cognitive abilities are closely assessed during hiring (e.g. health care and services).

Among highly educated immigrants, young recent arrivals initially perform almost on par with their native colleagues, but this advantage fades sharply by prime working age. The pattern suggests that skills may deteriorate over time due to prolonged occupational mismatch – or that those with stronger skills are more likely to return to their home countries.

Complex tasks are given to the more skilled, regardless of origin

Even when immigrants work in the same jobs as native workers, they tend to perform fewer cognitively demanding tasks. On average, they carry out significantly fewer abstract tasks (e.g. analytical problem-solving, writing and planning) as well as fewer routine cognitive tasks (e.g. organising work, basic numeracy and information exchange). The gap amounts to around 0.2 to 0.3 standard deviations.

At first glance, this might suggest unfair treatment: the same job title, but fewer demanding responsibilities. However, the study shows that such a conclusion would be misleading. Once the analysis takes into account each worker’s cognitive proficiency relative to the average in their specific job group, the differences largely disappear and are no longer statistically significant. In other words, an immigrant whose literacy and numeracy skills match the average for their particular role performs just as many complex tasks as a native colleague with the same skill level. Task allocation, the authors conclude, reflects measured cognitive ability rather than migrant status.

Further evidence comes from manual work. For physical, hands-on tasks, the study finds no differences at all between immigrants and natives – either before or after controlling for skills. If discrimination were the main driver, one would expect immigrants to be pushed towards more physical work to compensate for exclusion from cognitive tasks. The absence of such a pattern strongly suggests that the differences observed are rooted in skills rather than discrimination.

Invest in skills, not just anti-discrimination measures at work

‘Our findings redirect policy attention away from workplace task allocation and towards the human capital deficits that persist long after immigrants enter employment’, says Tverdostup, an economist at wiiw and the lead author of the study. ‘The skill gap that survives within narrowly defined jobs – roughly 70% of the overall gap – is the binding constraint on integration outcomes.’

The findings point to four clear policy implications:

First, systems for recognising foreign qualifications need to go beyond formal degree titles and place greater emphasis on assessing actual competencies.

Second, language training and cognitive skill development should begin early in the integration process. Workplace experience alone does not appear to close proficiency gaps, and the data show little evidence that these differences narrow over time.

Third, bridging programmes that support early entry into the labour market – and help migrants to move into jobs that match their skills – are crucial. This is particularly important for highly educated immigrants, who risk losing skills if they remain in roles that do not make use of their qualifications.

Finally, while the study finds no evidence that immigrants are assigned different tasks once differences in skills are taken into account, it does not rule out discrimination in other areas (e.g. hiring, wage-setting or access to training). These potential channels, the authors note, still deserve close policy attention.

‘Addressing immigrants’ cognitive disadvantage requires investment in education and direct competency assessment, rather than relying solely on anti-discrimination measures at work,’ Tverdostup concludes. ‘Getting that right, matters not just for immigrants, but for the productivity of European countries as a whole.’

Funding: The study was financially supported by the Oesterreichische Nationalbank (anniversary fund, grant number 18934).