Returns-to-education gaps between native and migrant workers: the infl uence of economic integration on their drivers. Are Active Labour Market Policies (ALMPs) an eff ective remediation tool? A case comparison: Italy, Germany, Denmark and Cyprus

Abstract

This paper answers the research question of whether economicintegration influences the drivers behind returns to education for native, EU and non-EU workers in the selected countries. It fills two gaps in the literature, assessing the role of economic integration in determining differences in returns on investments in education and testing whether ALMPs can bridge them. The literature has identified that returns to education vary between national and foreign workers. Differences among nationality groups regarding the quality of their educational background, their knowledge of the hosting labor market, or the mismatch between the qualifications and skills acquired abroad and those demanded by the local economy have been put forward to explain the gaps in returns to education. This paper contends that those factors might be economic reasons behind the differences in the returns to education but that their effect is mediated by the different degrees of economic integration between the host country and workers’ home country.