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Overeducation in developing economies: How can we test for it, and what does it mean?

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  • Mehta, Aashish
  • Felipe, Jesus
  • Quising, Pilipinas
  • Camingue, Sheila
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    Abstract

    A worker is said to be overeducated if he/she has acquired more education than is required to perform his/her job. In the absence of data measuring the number of years of schooling required to perform particular jobs, we propose a new approach to testing for overeducation. Overeducation is confirmed if we observe that education levels rose in jobs that offer very low returns to education and that underwent little technological change. Using labor force surveys from four developing countries, we find evidence of overeducation in unskilled jobs in the Philippines, mild evidence in Mexico, and little evidence in India and Thailand. We show that a job's mean and modal years of schooling are poor proxies for required education. We also show that overeducation sometimes increases within unskilled jobs, even while a growing share of educated workers enter skilled jobs. This may be because the quality of education segments the labor market.

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    Bibliographic Info

    Article provided by Elsevier in its journal Economics of Education Review.

    Volume (Year): 30 (2011)
    Issue (Month): 6 ()
    Pages: 1334-1347

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    Handle: RePEc:eee:ecoedu:v:30:y:2011:i:6:p:1334-1347

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    Web page: http://www.elsevier.com/locate/econedurev

    Related research

    Keywords: Returns to education; Human capital; Economic development;

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    Cited by:
    1. Tani, Massimiliano, 2012. "Does Immigration Policy Affect the Education-Occupation Mismatch? Evidence from Australia," IZA Discussion Papers 6937, Institute for the Study of Labor (IZA).
    2. Kiersztyn, Anna, 2013. "Stuck in a mismatch? The persistence of overeducation during twenty years of the post-communist transition in Poland," Economics of Education Review, Elsevier, vol. 32(C), pages 78-91.
    3. Paula Herrera & Enrique López-Bazo & Elisabet Motellón, 2013. "“Double Penalty in Returns to Education: Informality and Educational Mismatch in the Colombian Labour market”," IREA Working Papers 201307, University of Barcelona, Research Institute of Applied Economics, revised May 2013.
    4. Paula Herrera & Enrique López-Bazo & Elisabet Motellón, 2013. "“Informality and Overeducation in the Labor Market of a Developing Country”," AQR Working Papers 201303, University of Barcelona, Regional Quantitative Analysis Group, revised Apr 2013.
    5. Carroll, David & Tani, Massimiliano, 2013. "Over-education of recent higher education graduates: New Australian panel evidence," Economics of Education Review, Elsevier, vol. 32(C), pages 207-218.
    6. Carroll, David & Tani, Massimiliano, 2013. "Job Search as a Determinant of Graduate Over-Education: Evidence from Australia," IZA Discussion Papers 7202, Institute for the Study of Labor (IZA).

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