Is overqualification a stepping stone for career progression among children of immigrants?

Overqualification is one of the key labor market disadvantages that the children of immigrants born in the host society—the second-generation (G2)—disproportionately experience compared to the majority population. A higher prevalence of overqualification among the G2 may result from their strategic choice to circumvent persistent unemployment but also from the use of overqualification as a stepping stone into adequate employment —as predicted by career mobility theory. In light of this consideration, our paper investigates 1) to what extent overqualification and unemployment differently lead to career progression into adequately matched employment and 2) how this varies between the second-generation and majority populations. This study draws on Swedish register data on the total population and applies dynamic correlated random-effects multinomial logistic models to investigate year-to-year transitions across labor market states. Our results show that the chances of moving to adequate employment are higher for unemployed individuals than for overqualified workers. This result, which holds for both the majority population and G2 groups, is against the idea that overqualification serves as a stepping stone. We find that the chances of transitioning from overqualification and unemployment to adequate employment are higher for the majority population compared to most G2 groups. Although not the main focus of this paper, our analysis also provides evidence of higher risks for G2 overqualified workers to become unemployed and for G2 unemployed individuals to remain entrapped in unemployment. Together, these findings indicate a vicious cycle of career disadvantages for the G2.