IDEAS home Printed from https://ideas.repec.org/a/bla/asiaec/v30y2016i4p375-400.html
   My bibliography  Save this article

Effects of Educational Mistmatch on Wages in the Korean Labor Market

Author

Listed:
  • Hanol Lee
  • Jong‐Wha Lee
  • Eunbi Song

Abstract

Using data on Korean workers from the Programme for the International Assessment of Adult Competencies, the present study empirically investigates the incidence and wage effects of educational mismatch. Among full‐time workers aged 25–54, approximately 27 percent are overeducated and 15 percent are undereducated. Our results reveal that, after controlling for omitted variable bias and measurement errors, return to an additional year of overeducation is significantly less than that to a year of required education, whereas undereducated workers do not appear to suffer wage penalties associated with their deficit schooling. The findings also show that returns to a year of overeducation vary across fields of study. The returns to overeducation for college graduates from health and welfare, engineering and manufacturing, and social sciences, business and law are relatively high compared with those in agriculture, services, and humanities and arts.

Suggested Citation

  • Hanol Lee & Jong‐Wha Lee & Eunbi Song, 2016. "Effects of Educational Mistmatch on Wages in the Korean Labor Market," Asian Economic Journal, East Asian Economic Association, vol. 30(4), pages 375-400, December.
    • Handle: RePEc:bla:asiaec:v:30:y:2016:i:4:p:375-400
    DOI: 10.1111/asej.12105
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/asej.12105
    Download Restriction: no
    File URL: https://libkey.io/10.1111/asej.12105?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. James Albrecht & Susan Vroman, 2002. "A Matching Model with Endogenous Skill Requirements," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(1), pages 283-305, February.
    2. Allen, Jim & van der Velden, Rolf, 2001. "Educational Mismatches versus Skill Mismatches: Effects on Wages, Job Satisfaction, and On-the-Job Search," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 434-452, July.
    3. Bauer, Thomas K., 2002. "Educational mismatch and wages: a panel analysis," Economics of Education Review, Elsevier, vol. 21(3), pages 221-229, June.
    4. Rolf van der Velden & Mark Levels & Jim Allen, 2014. "Educational mismatches and skills: New empirical tests of old hypotheses," Investigaciones de Economía de la Educación volume 9, in: Adela García Aracil & Isabel Neira Gómez (ed.), Investigaciones de Economía de la Educación 9, edition 1, volume 9, chapter 34, pages 655-680, Asociación de Economía de la Educación.
    5. F Green & Steven McIntosh & Anna Vignoles, 1999. "Overeducation and Skills - Clarifying the Concepts," CEP Discussion Papers dp0435, Centre for Economic Performance, LSE.
    6. Sandra Nieto & Raul Ramos, 2017. "Overeducation, Skills and Wage Penalty: Evidence for Spain Using PIAAC Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 134(1), pages 219-236, October.
    7. Ides Nicaise, 2001. "Human capital, reservation wages and job competition: Heckman's lambda re-interpreted," Applied Economics, Taylor & Francis Journals, vol. 33(3), pages 309-315.
    8. Sicherman, Nachum & Galor, Oded, 1990. "A Theory of Career Mobility," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 169-192, February.
      • Galor, Oded & Sicherman, Nachum, 1988. "A Theory of Career Mobility," Working Papers 51, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    9. Eleni Kalfa & Matloob Piracha, 2017. "Immigrants’ educational mismatch and the penalty of over-education," Education Economics, Taylor & Francis Journals, vol. 25(5), pages 462-481, September.
    10. Floro Ernesto Caroleo & Francesco Pastore, 2012. "Overeducation at a glance. Determinants and wage effects of the educational mismatch, looking at the AlmaLaurea data," Discussion Papers 18_2012, CRISEI, University of Naples "Parthenope", Italy.
    11. Arnaud Chevalier, 2003. "Measuring Over-education," Economica, London School of Economics and Political Science, vol. 70(279), pages 509-531, August.
    12. Tsang, Eric W. K., 2014. "Old and New," Management and Organization Review, Cambridge University Press, vol. 10(03), pages 390-390, November.
    13. Korpi, Tomas & Tåhlin, Michael, 2009. "Educational mismatch, wages, and wage growth: Overeducation in Sweden, 1974-2000," Labour Economics, Elsevier, vol. 16(2), pages 183-193, April.
    14. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    15. Dieter Verhaest & Eddy Omey, 2006. "The Impact of Overeducation and its Measurement," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 77(3), pages 419-448, July.
    16. Francis Green & Steven McIntosh & Anna Vignoles, 2002. "The Utilization of Education and Skills: Evidence from Britain," Manchester School, University of Manchester, vol. 70(6), pages 792-811, December.
    17. Duncan, Greg J. & Hoffman, Saul D., 1981. "The incidence and wage effects of overeducation," Economics of Education Review, Elsevier, vol. 1(1), pages 75-86, February.
    18. Oded Galor & Nachum Sicherman, 1988. "A Theory of Career Mobility," Working Papers 1988-27, Brown University, Department of Economics.
    19. Sattinger, Michael, 1993. "Assignment Models of the Distribution of Earnings," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 831-880, June.
    20. Wim Groot & Henriëtte Maasen Van Den Brink, 1997. "Allocation and the Returns to Over-education in the UK," Education Economics, Taylor & Francis Journals, vol. 5(2), pages 169-183.
    21. Tsai, Yuping, 2010. "Returns to overeducation: A longitudinal analysis of the U.S. labor market," Economics of Education Review, Elsevier, vol. 29(4), pages 606-617, August.
    22. John Robst, 1994. "Measurement error and the returns to excess schooling," Applied Economics Letters, Taylor & Francis Journals, vol. 1(9), pages 142-144.
    23. Jan Kleibrink, 2016. "Inept or Badly Matched? — Effects of Educational Mismatch in the Labor Market," LABOUR, CEIS, vol. 30(1), pages 88-108, March.
    24. Glenda Quintini, 2011. "Right for the Job: Over-Qualified or Under-Skilled?," OECD Social, Employment and Migration Working Papers 120, OECD Publishing.
    25. Jong-Wha Lee & Dainn Wie, 2017. "Returns to Education and Skills in the Labor Market: Evidence from Japan and Korea," Asian Economic Policy Review, Japan Center for Economic Research, vol. 12(1), pages 139-160, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhen Cui & Yalan Feng, 2017. "Wealthy Hand-to-Mouth Households in China," Asian Economic Journal, East Asian Economic Association, vol. 31(3), pages 275-297, September.
    2. Agnieszka Chlon-Dominczak & Andrzej Zurawski, 2017. "Measuring skills mismatches revisited – introducing sectoral approach," IBS Working Papers 03/2017, Instytut Badan Strukturalnych.
    3. Han, Jong-Suk & Lee, Jong-Wha, 2020. "Demographic change, human capital, and economic growth in Korea," Japan and the World Economy, Elsevier, vol. 53(C).
    4. Zainizam Zakariya & Kristinn Hermanssons & Kho Yin Yin & Noor Fazlin Mohamed Noor, 2019. "Regional Economic Growth in Malaysia: Does Aggregate Overqualification Matter?," Research in World Economy, Research in World Economy, Sciedu Press, vol. 10(5), pages 139-156, December.
    5. Joongbaeck Kim & Soo-Yeon Yoon, 2018. "Association between socioeconomic attainments and suicidal ideation by age groups in Korea," International Journal of Social Psychiatry, , vol. 64(7), pages 628-636, November.
    6. Tromp, Nikolas, 2019. "The narrowing gender wage gap in South Korea," Journal of the Japanese and International Economies, Elsevier, vol. 53(C), pages 1-1.
    7. Jong-Wha Lee & Dainn Wie, 2017. "Returns to Education and Skills in the Labor Market: Evidence from Japan and Korea," Asian Economic Policy Review, Japan Center for Economic Research, vol. 12(1), pages 139-160, January.
    8. Mamiko Takeuchi, 2021. "Determinants of Earnings and Gender Earnings Gaps among Highly Educated Workers within Major Cities in Asian Countries," Asian Economic Journal, East Asian Economic Association, vol. 35(2), pages 166-186, June.
    9. Maqbool H. Sial & Ghulam Sarwar & Mubashra Saeed, 2019. "Surplus Education and Earnings Differentials in Pakistan: A Quantile Regression Analysis," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 24(2), pages 93-114, July-Dec.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Inmaculada Garc�a-Mainar & V�ctor M. Montuenga-G�mez, 2017. "Subjective educational mismatch and signalling in Spain," Documentos de Trabajo dt2017-03, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza.
    2. Floro Ernesto Caroleo & Francesco Pastore, 2018. "Overeducation at a Glance. Determinants and Wage Effects of the Educational Mismatch Based on AlmaLaurea Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 137(3), pages 999-1032, June.
    3. Sandra Nieto & Raul Ramos, 2017. "Overeducation, Skills and Wage Penalty: Evidence for Spain Using PIAAC Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 134(1), pages 219-236, October.
    4. Daniel Erdsiek, 2016. "Overqualification of graduates: assessing the role of family background [Überqualifikation von Hochschulabsolventen: Welche Rolle spielt der familiäre Hintergrund?]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 49(3), pages 253-268, November.
    5. Christina Boll & Julian Sebastian Leppin, 2016. "Differential Overeducation in East and West Germany: Extending Frank's Theory on Economic Returns Changes the Picture of Disadvantaged Women," LABOUR, CEIS, vol. 30(4), pages 455-504, December.
    6. Marta Palczyńska, 2021. "Overeducation and wages: the role of cognitive skills and personality traits," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 21(1), pages 85-111.
    7. Henna Ahsan, 2024. "Impact of Education Mismatch on Earnings: Evidence from Pakistan’s Labor Market," PIDE-Working Papers 2024:1, Pakistan Institute of Development Economics.
    8. Berlingieri, Francesco & Erdsiek, Daniel, 2012. "How relevant is job mismatch for German graduates?," ZEW Discussion Papers 12-075, ZEW - Leibniz Centre for European Economic Research.
    9. Marco Pecoraro, 2014. "Is There Still a Wage Penalty for Being Overeducated But Well-matched in Skills? A Panel Data Analysis of a Swiss Graduate Cohort," LABOUR, CEIS, vol. 28(3), pages 309-337, September.
    10. Kampelmann, Stephan & Rycx, François, 2012. "The impact of educational mismatch on firm productivity: Evidence from linked panel data," Economics of Education Review, Elsevier, vol. 31(6), pages 918-931.
    11. L. Cattani & G. Guidetti & G. Pedrini, 2014. "Assessing the incidence and wage effects of overeducation among Italian graduates using a new measure for educational requirements," Working Papers wp939, Dipartimento Scienze Economiche, Universita' di Bologna.
    12. Iñaki Iriondo & Teodosio Pérez-Amaral, 2013. "The Effect of Educational Mismatch on Wages Using European Panel Data," Working Papers 700, Queen Mary University of London, School of Economics and Finance.
    13. Iñaki Iriondo & Teodosio Pérez-Amaral, 2013. "The Effect of Educational Mismatch on Wages Using European Panel Data," Working Papers 700, Queen Mary University of London, School of Economics and Finance.
    14. Joaquin Turmo-Garuz & M.-Teresa Bartual-Figueras & Francisco-Javier Sierra-Martinez, 2019. "Factors Associated with Overeducation Among Recent Graduates During Labour Market Integration: The Case of Catalonia (Spain)," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 144(3), pages 1273-1301, August.
    15. Oliver Fabel & Razvan Pascalau, 2013. "Recruitment of Seemingly Overeducated Personnel: Insider--Outsider Effects on Fair Employee Selection Practices," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 20(1), pages 57-82, February.
    16. Rycx, François & Santosuosso, Giulia & Vermeylen, Guillaume, 2022. "The Over-education Wage Penalty Among PhD Holders: A European Perspective," GLO Discussion Paper Series 1126, Global Labor Organization (GLO).
    17. Ghignoni, Emanuela & Verashchagina, Alina, 2014. "Educational qualifications mismatch in Europe. Is it demand or supply driven?," Journal of Comparative Economics, Elsevier, vol. 42(3), pages 670-692.
    18. Luca Cattani & Giovanni Guidetti & Giulio Pedrini, 2018. "Overeducation among Italian graduates: do different measures diverge?," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 35(2), pages 491-521, August.
    19. Inmaculada García-Mainar & Víctor M. Montuenga-Gómez, 2020. "Over-Qualification and the Dimensions of Job Satisfaction," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 147(2), pages 591-620, January.
    20. Nancy Kracke & Margarida Rodrigues, 2020. "A Task-Based Indicator for Labour Market Mismatch," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 149(2), pages 399-421, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:asiaec:v:30:y:2016:i:4:p:375-400. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/eaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.