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.