Brain waste: Immigrants overqualified but underemployed and underpaid

Across Europe, highly-educated migrants work in jobs that they are overqualified for and earn significantly less than their local counterparts, a collaborative investigative series by Lighthouse Reports, the Financial Times, El Pais, and Unbias the News reveals.

The findings in the investigation indicate the pervasiveness of the phenomenon known as brain waste which indicates a misalignment in the jobs that migrants work in and their academic qualifications. Brain waste also refers to working fewer hours than desired or being unemployed for a period of time.

The report analyzed data from Eurostat’s Labor Force Survey from 2017 to 2022 for all EU countries plus Norway, Switzerland, Iceland, and the United Kingdom (until 2019). The results indicated almost half of college-educated migrants in Europe are overqualified for the jobs they are working and nearly twice as likely as natives to be unemployed. This is despite the near parity in education levels between locals and immigrants. Educated migrant women are more likely to face higher rates of unemployment. While asylum seekers were shown to have the worst employment and brain waste outcomes across any of the migrant groups.

Also read: Labor migration to the EU – what can Europe do better?

Hurts both migrants and the economy

Europe faces significant labor shortages due to factors such as an aging population, Brexit policies, and conflicts like the war in Ukraine. Despite mounting resistance to immigration across the Euro Zone, many European countries have recognized the necessity of migrant labor to power their economies and prevent sliding into a financial decline. Many countries have eased immigration policies, particularly to attract skilled migrant workers.

However, the liberalized policies have failed to adequately address the need for equitable working conditions, especially when it comes to wages, the investigation points out. It revealed that European migrant graduates earn €2,000 less each year compared to local graduates who have similar degrees. This income gap translates to about 10.7 billion euros in lost wages which is equivalent to 0.12 % of the countries’ combined GDP. Additionally, the report found that efforts to implement accelerated degree recognition programs have barely made a dent in addressing brain waste.

Migrants from Africa, Asia, and Latin and Central America were found to have been more affected by brain waste compared to migrants from higher-income countries.

The loss in earnings potential isn’t just a pain point for migrants, it also hurts the economy. If migrants were employed in positions that matched their educational qualifications and received the same pay as their native counterparts, the European economy could grow by an estimated 33.8 billion euros.

Also read: Eastern Europe: Labor migration is on the rise

Not all countries equal

The investigation also revealed varying levels of brain waste across Europe, with Italy, Greece, Spain, and Sweden among the countries performing poorly. Analysis of skilled migrant situations and interviews with college-educated migrants in Ireland, Portugal, and Sweden illustrates how labor market outcomes differ due to varying opportunities and barriers.

However, Portugal stands out as effectively integrating highly educated migrants. In Western Europe’s poorest country, college-educated migrants experience lower rates of overqualification, underemployment, and unemployment. Additionally, there is greater parity between migrant and native graduates in Portugal, with teaching, nursing, engineering, and finance roles being common occupations among both groups.

Portugal’s success is attributed to the government’s recognition of the economic benefits migrants bring, supported by policies including free language training, mentoring programs, and entrepreneurship courses.

Also read: Portugal signs immigration deal with Morocco