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Effects of educational mismatch on private returns to education: An analysis of the Spanish case (1995–2006)

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  • Murillo, Inés P.
  • Rahona-López, Marta
  • Salinas-Jiménez, Maria del Mar

Abstract

This study examines the effects of educational mismatch on wages in the Spanish labour market since the mid-nineties. First we study the evolution of returns to education and then we estimate returns to education in terms of the match between the worker's schooling and the job requirements. The results indicate that returns to education have declined since the mid-nineties. One also finds that the return associated with the job's required education is greater than that corresponding to the worker's actual schooling, and that the return on an additional year of attained education is positive but less than that of an additional year of required education. From a policy perspective, the existence of educational mismatch points to inefficiencies in the allocation of the educational resources. Investment on education can positively contribute to alleviate the unemployment problem in Spain, but taken into account the existence of educational mismatch it also becomes necessary to introduce structural reforms in order to adapt the job structure to a model of production based on knowledge so that the more highly qualified workers can find a job that corresponds to their educational level.

Suggested Citation

  • Murillo, Inés P. & Rahona-López, Marta & Salinas-Jiménez, Maria del Mar, 2012. "Effects of educational mismatch on private returns to education: An analysis of the Spanish case (1995–2006)," Journal of Policy Modeling, Elsevier, vol. 34(5), pages 646-659.
    • Handle: RePEc:eee:jpolmo:v:34:y:2012:i:5:p:646-659
    DOI: 10.1016/j.jpolmod.2011.07.012
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    Cited by:

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    2. Lucía Mateos-Romero & María del Mar Salinas-Jiménez, 2017. "Skills Heterogeneity Among Graduate Workers: Real and Apparent Overeducation in the Spanish Labor Market," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 132(3), pages 1247-1264, July.
    3. Hugo Horta, 2023. "Emerging and Near Future Challenges of Higher Education in East Asia," Asian Economic Policy Review, Japan Center for Economic Research, vol. 18(2), pages 171-191, July.
    4. Chung‐Khain WYE & Rahmah ISMAIL, 2019. "The effects of ability on returns to over‐ and under‐education: Evidence from Malaysia," International Labour Review, International Labour Organization, vol. 158(3), pages 535-559, September.
    5. 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.
    6. Ponzo, Michela, 2013. "Does bullying reduce educational achievement? An evaluation using matching estimators," Journal of Policy Modeling, Elsevier, vol. 35(6), pages 1057-1078.
    7. Isabel ARAÚJO & Anabela CARNEIRO, 2023. "Educational mismatches of newly hired workers: Short‐ and medium‐term effects on wages," International Labour Review, International Labour Organization, vol. 162(3), pages 355-383, September.
    8. Blázquez, Maite & Herrarte, Ainhoa & Llorente-Heras, Raquel, 2018. "Competencies, occupational status, and earnings among European university graduates," Economics of Education Review, Elsevier, vol. 62(C), pages 16-34.
    9. Iriondo, Iñaki & Pérez-Amaral, Teodosio, 2016. "The effect of educational mismatch on wages in Europe," Journal of Policy Modeling, Elsevier, vol. 38(2), pages 304-323.
    10. Ponzo, Michela & Scoppa, Vincenzo, 2014. "The long-lasting effects of school entry age: Evidence from Italian students," Journal of Policy Modeling, Elsevier, vol. 36(3), pages 578-599.
    11. Wu, Na & Wang, Qunyong, 2018. "Wage penalty of overeducation: New micro-evidence from China," China Economic Review, Elsevier, vol. 50(C), pages 206-217.
    12. Mateos Romero, Lucía & Murillo Huertas, Inés P. & Salinas Jiménez, Mª del Mar, 2017. "Wage effects of cognitive skills and educational mismatch in Europe," Journal of Policy Modeling, Elsevier, vol. 39(5), pages 909-927.
    13. Balzhan Serikbayeva & Kanat Abdulla, 2022. "Education-Job Mismatch: Implications for Individual Earnings and Aggregate Output," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 163(2), pages 723-752, September.
    14. Araújo, Isabel & Carneiro, Anabela, 2020. "Educational Mismatches of Newly Hired Workers: Short and Medium-run Effects on Wages," GLO Discussion Paper Series 668, Global Labor Organization (GLO).
    15. Doon, Roshnie, 2021. "Overeducation in Trinidad and Tobago's Labour Market: A Quantile Regression Approach," GLO Discussion Paper Series 822, Global Labor Organization (GLO).
    16. Bender, Keith A. & Roche, Kristen, 2013. "Educational mismatch and self-employment," Economics of Education Review, Elsevier, vol. 34(C), pages 85-95.
    17. Mateos-Romero, Lucía & Salinas Jiménez, María del Mar, 2015. "Skills heterogeneity among graduate workers: real and apparent overeducation in the Spanish labor market," MPRA Paper 64372, University Library of Munich, Germany.
    18. Garcia-Mainar, Inmaculada & Montuenga, Victor M., 2019. "The signalling role of over-education and qualifications mismatch," Journal of Policy Modeling, Elsevier, vol. 41(1), pages 99-119.

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    More about this item

    Keywords

    Return to education; Required education; Overeducation; Undereducation;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • I29 - Health, Education, and Welfare - - Education - - - Other
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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