Earnings and Languages in the Family: Second-Generation Australians*

This paper uses Household, Income and Labour Dynamics in Australia data to assess the performance of second-generation Australians in full-time employment in 2007. It examines the role of job mismatch and cultural and linguistic diversity at the individual and family levels. The study accounts for non-random sample selection. The new evidence shows that: (i) over-education and over-skilling carry a wage penalty; (ii) there are significant but heterogeneous second-generation effects; and (iii) language effects explain most of the disadvantage associated with non-English-speaking background.