The visible and the hidden behind migrants’ human capital

The paper explores differences in human capital between the Israel-born and immigrants within the Jorgenson and Fraumeni model. Using a unique ‘imputed education’ method, the study answers whether the immigrants’ level of education, in fact, reflects their human capital. The results show that immigrants during their first years do not work in an occupation that fits their education; this holds their estimated human capital below that of the Israel-born. Over the years, the gap between immigrants and non-immigrants in per-capita human capital contracted from 30 percent to 14 percent on average, or, using the imputation method, from 23 percent to 9 percent. In addition, the gaps between the immigrants and nonimmigrants and those between original education and imputed education contract at higher education levels. Some immigrants were able to find an occupation that matched their education and to integrate into the local job market, and the per-capita human capital of immigrants and nonimmigrants converged.