Graduate overeducation and its effects among recently arrived immigrants to Australia: A longitudinal survey

There is increasing importance attached to skill-based immigration in many countries including Australia. This paper investigates the incidences, determinants, and returns to graduate overeducation among tertiary qualified immigrants during the early phase of their settlement in Australia. We place particular emphasis on visa categories and region of origin. As expected, those on visas with higher skill requirements perform better in the labour market. The bulk of these are immigrants from English Speaking Backgrounds (ESB). Non-English Speaking Background (NESB) immigrants, on the other hand, have higher and persistent rates of overeducation. The wage returns to required and surplus education match the stylized facts of overeducation for ESB and Other NESB immigrants while Asian NESB immigrants receive no return to surplus education. Thus, the results suggest that NESB graduate immigrants are a heterogeneous group, with Asian graduate immigrants facing greater assimilation hurdles in the Australian labour market.

Fixed wages and bonuses in agency contracts: the case of a continuous state space

In this paper, we extend the state-contingent production approach to principal–agent problems to the case where the state space is an atomless continuum. The approach is modelled on the treatment of optimal tax problems. The central observation is that, under reasonable conditions, the optimal contract may involve a fixed wage with a bonus for above-normal performance. This is analogous to the phenomenon of "bunching" at the bottom in the optimal tax literature.

On labour market dualism in the Lewis model: A comment

In a special issue of this journal commemorating the 50th anniversary of W. Arthur Lewis's (The Manchester School, Vol. 28 (1954), No. 2, pp. 139-191) seminal paper, the Lewis model is treated as a model of labour market dualism (Fields, The Manchester School, Vol. 72 (2004), No. 6, pp. 724-735). This interpretation is flawed for a number of reasons. First, it overemphasizes the role ascribed by Lewis to intersectoral earnings differentials in his original model. Second, it fails to acknowledge that a major shortcoming of the model was its inability to account for the widening intersectoral earnings differential observed across a wide range of developing economies. For Lewis himself this was one of the 'major theoretical puzzles of the period' (1979, p. 150). Third, it ignores Lewis's subsequent revision of the model (Lewis, The Manchester School, Vol. 47 (1979), No. 3, pp. 211-229) that, ironically, incorporates a dual labour market to resolve this puzzle. However, for Lewis the critical issue was dualism within the modern sector, not, as Fields understands it, labour market dualism between the modern and traditional sectors. Fields's appreciation of the contribution of the Lewis model to understanding the process of wage determination in developing economies is therefore misplaced.