["Population, Space and Place, Volume 32, Issue 4, May 2026. ", "\nABSTRACT\nLiterature on the social construction of skilled migration has demonstrated how the selective admission of ‘skilled migrants’ by host states produces unequal outcomes, admitting some as ‘skilled’ while excluding others with seemingly similar qualifications. This study examines the other side of this construction and its connection with inequality: how the state's inclusion of individuals with differing skill levels into the same ‘skilled migrants’ category generates stratification. It focuses on Japan, where international students with varying levels of Japanese language proficiency have been admitted as ‘skilled migrants’ after graduation under recent policy changes. Drawing on interviews with foreign graduates working in Japan, the study argues that the state's expansion of the ‘skilled migrants’ category produces a form of stratification characterized by multi‐layered inequality, comprising three domains: labour markets, legal rights and (in)formal status. Furthermore, the study finds that these domains are interconnected. While different skill profiles directly shape labour market inequality, this inequality in turn affects legal rights stratification through bureaucratic practices that allocate different periods of residence based on applicants' economic potential. Additionally, labour market inequality connects with (in)formal status stratification through the state's issuance of skilled migration visas to those performing work that falls outside state‐defined ‘skilled’ (mostly white‐collar) work, an unintended policy outcome largely driven by employers' misuse of visa applications amid labour shortages in low‐wage sectors. Multi‐layered inequality thus highlights the interlocked nature of multiple domains of inequality, compounding disadvantages for those with lower skill profiles and implying divergent trajectories of integration among ‘skilled migrants’.\n"]