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Wage Consequences of Rapid Tertiary Education Expansion in a Developing Economy: The Case of Thailand

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  • Sasiwimon Warunsiri Paweenawat
  • Jessica Vechbanyongratana

Abstract

type="main"> In recent years, Thailand has experienced the emergence of “overeducated” workers as the supply of university graduates in Thailand has outpaced growth in high-skilled employment opportunities. Using the 2007 to 2009 Thai Labor Force Survey, this paper quantifies the incidence of overeducation and estimates overeducation wage penalties among male university graduates. The results show that the incidence of overeducation is greatest among younger cohorts. Quantile wage regression results suggest that overeducation wage penalties for older workers capture the impact of unobserved low ability on wages. In contrast, persistent wage penalties of 11–26% across the wage/ability distributions for younger workers are consistent with structural imbalances in the Thai labor market. These imbalances make it difficult for university graduates to find jobs commensurate with their level of formal education and to achieve their full earning power. The wage penalties are especially large for new entrants into the labor market.

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  • Sasiwimon Warunsiri Paweenawat & Jessica Vechbanyongratana, 2015. "Wage Consequences of Rapid Tertiary Education Expansion in a Developing Economy: The Case of Thailand," The Developing Economies, Institute of Developing Economies, vol. 53(3), pages 218-231, September.
    • Handle: RePEc:bla:deveco:v:53:y:2015:i:3:p:218-231
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    File URL: http://hdl.handle.net/10.1111/deve.12078
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    Cited by:

    1. Dai Binh Tran & Sasiwimon Warunsiri Paweenawat, 2023. "The returns to education and wage penalty from overeducation: New evidence from Vietnam," Bulletin of Economic Research, Wiley Blackwell, vol. 75(4), pages 1267-1290, October.
    2. Nada Wasi & Sasiwimon Warunsiri Paweenawat & Chinnawat Devahastin Na Ayudhya & Pucktada Treeratpituk & Chommanart Nittayo, 2019. "Labor Income Inequality in Thailand: the Roles of Education, Occupation and Employment History," PIER Discussion Papers 117, Puey Ungphakorn Institute for Economic Research.
    3. Sasiwimon Warunsiri Paweenawat & Lusi Liao, 2022. "Brain over Brawn: Job Polarization, Structural Change, and Skill Prices," PIER Discussion Papers 189, Puey Ungphakorn Institute for Economic Research.

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