Foreign Experience Discount

In Simple Words

Think of a driver's license from a foreign country. Even if a driver has navigated roads for years abroad, local testing officials do not know the traffic rules or driving culture of that driver's hometown, so they treat the driver as a beginner and require local road test experience before trusting their skills.

Research question

Skilled immigrants arriving under point-based immigration systems experience persistent labor market disadvantages because host-country employers heavily discount job experience acquired in foreign countries compared to host-country experience.

Participants

N = 12,910 resumes submitted to 3,225 job postings across 20 occupations in Toronto and Montreal, Canada (human job applicants aged 25-39).

Study Design

Randomized field experiment / resume audit study submitting four mock resumes per employer, systematically varying foreign versus domestic work experience while holding job descriptions identical.

Results

Resumes with foreign qualifications and foreign experience received a 6.0% callback rate compared to 15.7% for native Canadian resumes. Adding one domestic Canadian job increased callback rates from 6.0% to 8.5%, while replacing all foreign experience with Canadian experience raised callback rates to 11.0% (p < 0.01).

Takeaway

Establish standardized global work experience equivalency frameworks and subsidized bridge internships to help skilled immigrants obtain initial host-country work experience.

Related findings

• Anglo First-Name Signaling Inefficiency →Labour & employment

  Think of painting only the front door of a house a local traditional color while keeping the rest of the building in its original foreign architectural style. Passersby still classify the house as foreign because the underlying structure and remaining features remain unchanged.

• Anglo-Origin Experience Parity →Labour & employment

  Imagine a bank accepting foreign currency. If a customer brings in British pounds, the teller accepts them at full value without hesitation because the bank understands and trusts the currency system.

• Macroeconomic Productivity-Compensation Decoupling →Labour & employment

  Productivity-compensation decoupling is like a factory where output doubles, but worker pay stays flat. Economic gains flow predominantly to high-earning college-educated workers and capital owners, leaving non-college workers stuck in low-wage roles that do not share in broader economic expansion.

• Credential Signal Inefficiency →Labour & employment

  Think of driving a car with a cracked windshield. Sticking high-grade inspection stickers, luxury car badges, and certified maintenance receipts on the bumper does not stop a safety inspector from rejecting the vehicle as long as the crack across the front glass remains untouched.