Is there still a wage penalty for being overeducated but well-matched in skills? A panel data analysis of a Swiss graduate cohort
AbstractUsing two periods’ panel data from the Swiss Graduate Survey, this study examines the incidence and wage effects of overeducation. Contrary to most prior research, we account for graduate heterogeneity in perceived skills mismatch when measuring overeducation and correct for potential omitted ability bias in the estimated pay penalty associated with overeducation. We find that graduates who are overeducated and mismatched in skills (i.e. genuinely overeducated) are the most penalized in terms of earnings. This evidence is still valid when using the fixed effects approach, while the pay penalty is no more significant for graduates who are overeducated but matched in skills (i.e. apparently overeducated). This indicates that the wage effects for apparently overeducated graduates are mainly due to the omission of unobserved ability.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) with number 2011019.
Date of creation: 09 May 2011
Date of revision:
Overeducation; skills mismatch; wages; panel data analysis;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-07-21 (All new papers)
- NEP-EDU-2011-07-21 (Education)
- NEP-LAB-2011-07-21 (Labour Economics)
- NEP-LMA-2011-07-21 (Labor Markets - Supply, Demand, & Wages)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mavromaras, Kostas & McGuinness, Seamus & O?Leary, Nigel & Sloane, Peter & Fok, Yin King, 2009. "Job Mismatches and Labour Market Outcomes," Papers WP314, Economic and Social Research Institute (ESRI).
- Arnaud Chevalier, 2003. "Measuring Over-education," Economica, London School of Economics and Political Science, vol. 70(279), pages 509-531, 08.
- Frenette, Marc, 2004. "The overqualified Canadian graduate: the role of the academic program in the incidence, persistence, and economic returns to overqualification," Economics of Education Review, Elsevier, vol. 23(1), pages 29-45, February.
- Richard R. Verdugo & Naomi Turner Verdugo, 1989. "The Impact of Surplus Schooling on Earnings: Some Additional Findings," Journal of Human Resources, University of Wisconsin Press, vol. 24(4), pages 629-643.
- Leuven, Edwin & Oosterbeek, Hessel, 2011. "Overeducation and Mismatch in the Labor Market," IZA Discussion Papers 5523, Institute for the Study of Labor (IZA).
- Bauer, Thomas K., 2002. "Educational mismatch and wages: a panel analysis," Economics of Education Review, Elsevier, vol. 21(3), pages 221-229, June.
- Verhaest, Dieter & Omey, Eddy, 2009. "Overeducation and earnings: some further paneldata evidence," Working Papers 2009/08, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
- Hartog, Joop, 2000. "Over-education and earnings: where are we, where should we go?," Economics of Education Review, Elsevier, vol. 19(2), pages 131-147, April.
- Dolton, Peter J. & Silles, Mary A., 2008.
"The effects of over-education on earnings in the graduate labour market,"
Economics of Education Review,
Elsevier, vol. 27(2), pages 125-139, April.
- Mary Silles & Peter Dolton, 2002. "The Effects of Over-Education on Earnings in the Graduate Labour Market," Economics Series Working Papers 126, University of Oxford, Department of Economics.
- Francis Green & Yu Zhu, 2010.
"Overqualification, job dissatisfaction, and increasing dispersion in the returns to graduate education,"
Oxford Economic Papers,
Oxford University Press, vol. 62(4), pages 740-763, October.
- Francis Green & Yu Zhu, 2008. "Overqualification, Job Dissatisfaction, and Increasing Dispersion in the Returns to Graduate Education," Studies in Economics 0803, Department of Economics, University of Kent.
- Joanne Lindley & Steven McIntosh, 2010.
"Is the Over-Education Wage Penalty Permanent?,"
2010004, The University of Sheffield, Department of Economics, revised Jan 2010.
- 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.
- McGuinness, Seamus & Bennett, Jessica, 2007. "Overeducation in the graduate labour market: A quantile regression approach," Economics of Education Review, Elsevier, vol. 26(5), pages 521-531, October.
- Séamus McGuinness, 2006. "Overeducation in the Labour Market," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 387-418, 07.
- Dolton, Peter & Vignoles, Anna, 2000. "The incidence and effects of overeducation in the U.K. graduate labour market," Economics of Education Review, Elsevier, vol. 19(2), pages 179-198, April.
- John Robst, 2008. "Overeducation And College Major: Expanding The Definition Of Mismatch Between Schooling And Jobs," Manchester School, University of Manchester, vol. 76(4), pages 349-368, 07.
- 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.
- Dieter Verhaest & Eddy Omey, 2006. "Measuring the Incidence of Over- and Undereducation," Quality & Quantity: International Journal of Methodology, Springer, vol. 40(5), pages 783-803, October.
- Caroleo, Floro Ernesto & Pastore, Francesco, 2013.
"Overeducation at a Glance: Determinants and Wage Effects of the Educational Mismatch, Looking at the AlmaLaurea Data,"
IZA Discussion Papers
7788, Institute for the Study of Labor (IZA).
- 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.
- 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).
- Marco PECORARO, 2012. "The incidence and wage effects of overeducation using the worker’s self-assessment of skill utilization," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2012014, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anne DAVISTER-LOGIST).
If references are entirely missing, you can add them using this form.