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The Productivity Benefits of Overeducation

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  • Miana Plesca
  • Fraser Summerfield

Abstract

Overeducation is an issue of concern in the public discourse that has implications for aggregate labor productivity. Extending a literature focused on individual outcomes, we find productivity-enhancing effects in Canadian data by province and industry spanning 1997–2015. Dynamic panel models with external instruments show that productivity increases by about 3% for each 1% increase in the overeducation shares. Effects are largest among industries with more intangible capital investment or with more jobs that require university education and among small-firm employees that are not unionized. Our results provide yet another argument for the benefits of postsecondary education.

Suggested Citation

  • Miana Plesca & Fraser Summerfield, 2023. "The Productivity Benefits of Overeducation," Journal of Human Capital, University of Chicago Press, vol. 17(4), pages 463-502.
    • Handle: RePEc:ucp:jhucap:doi:10.1086/726630
    DOI: 10.1086/726630
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