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Overqualification: major or minor mismatch?

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  • Brynin, Malcolm
  • Lichtwardt, Beate
  • Longhi, Simonetta

Abstract

A large empirical literature suggests that a proportion of employees are over-educated (overqualified) for the jobs that they do. It also estimates the impact of this mismatch on wages The empirical results suggest that having more education than is needed for a job generates a premium relative to the job but at the same time a penalty relative to the qualification. This mismatch is often explained either by variation in skills or by a slow start to career. Both explanations are compatible with human capital theory. We measure the incidence of overqualification in four European countries: Britain, Italy, Germany and Norway at differing educational levels, to show that overqualification is most common at the lower levels where careers tend to be flatter. The inclusion of a measure of computer skills also seems to make little difference to the relationship between overqualification and wages. However, one issue which is important is the degree of voluntarism that is associated with progression through education. Overqualification is traditionally measured through years of education required for the job and years spent in education, but this can be separated into a part that reflects the achievement of certificates and a part that reflects the passage of time. The latter is strongly influenced by individual motivation which determines final choices and by institutional factors which might either enhance or constrain these. We isolate the number of excess years a person spends in education without reaching the next qualification level in order to use this as an instrument for over-education. Our results suggest that the impact of over-qualification on wages is rather small, and becomes even smaller when the excess years spent in education are used as instrument for over-education. Overqualification can on these results never be interpreted as a labour-market choice which provides some sort of human-capital premium.

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Bibliographic Info

Paper provided by Institute for Social and Economic Research in its series ISER Working Paper Series with number 2006-17.

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Date of creation: 01 Apr 2006
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Publication status: published
Handle: RePEc:ese:iserwp:2006-17

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Web page: https://www.iser.essex.ac.uk/
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Postal: Publications Office, Institute for Social and Economic Research, University of Essex, Wivenhoe Park, Colchester, Essex CO4 3SQ UK
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References

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  1. Trostel, P. & Walker, I., 2000. "Education and Work," The Warwick Economics Research Paper Series (TWERPS) 554, University of Warwick, Department of Economics.
  2. Rubb, S., 2003. "Overeducation in the labor market: a comment and re-analysis of a meta-analysis," Economics of Education Review, Elsevier, vol. 22(6), pages 621-629, December.
  3. 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.
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  6. Groeneveld, Sandra & Hartog, Joop, 2004. "Overeducation, wages and promotions within the firm," Labour Economics, Elsevier, vol. 11(6), pages 701-714, December.
  7. Daly, Mary C. & Buchel, Felix & Duncan, Greg J., 2000. "Premiums and penalties for surplus and deficit education: Evidence from the United States and Germany," Economics of Education Review, Elsevier, vol. 19(2), pages 169-178, April.
  8. Berg, G. van den & Gautier, P.A. & Ours, J.C. van & Ridder, G., 1998. "Worker turnover at the firm level and crowding out of lower educated workers," Discussion Paper 98.104, Tilburg University, Center for Economic Research.
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  12. Skalli, Ali, 2007. "Are successive investments in education equally worthwhile? Endogenous schooling decisions and non-linearities in the earnings-schooling relationship," Economics of Education Review, Elsevier, vol. 26(2), pages 215-231, April.
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  15. Sattinger, Michael, 1993. "Assignment Models of the Distribution of Earnings," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 831-80, June.
  16. Joshua D. Angrist & Alan B. Krueger, 1990. "Does Compulsory School Attendance Affect Schooling and Earnings?," NBER Working Papers 3572, National Bureau of Economic Research, Inc.
  17. Muysken,Joan & Hoppe,Mombert & Rieder,Hannah, 2002. "The Impact of education and mismatch on wages: Germany, 1984-2000," Research Memorandum 041, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  18. Arnaud Chevalier, 2000. "Graduate over-education in the UK," CEE Discussion Papers 0007, Centre for the Economics of Education, LSE.
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Citations

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Cited by:
  1. Simonetta Longhi & Malcolm Brynin, 2009. "Occupational Change in Britain and Germany," SOEPpapers on Multidisciplinary Panel Data Research 204, DIW Berlin, The German Socio-Economic Panel (SOEP).
  2. Léné, Alexandre, 2011. "Occupational downgrading and bumping down: The combined effects of education and experience," Labour Economics, Elsevier, vol. 18(2), pages 257-269, April.
  3. Oliver Fabel & Razvan Pascalau, 2007. "Recruitment of Overeducated Personnel: Insider-Outsider Effects on Fair Employee Selection Practices," TWI Research Paper Series 18, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
  4. Shirley Dex & Jo Lindley, 2007. "Labour market job matching for UK minority ethnic groups," Working Papers 2007003, The University of Sheffield, Department of Economics, revised Jan 2007.
  5. 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).
  6. repec:ese:iserwp:2013-11 is not listed on IDEAS
  7. Belfield, Clive, 2010. "Over-education: What influence does the workplace have?," Economics of Education Review, Elsevier, vol. 29(2), pages 236-245, April.
  8. Muysken, Joan & Vallizadeh, Ehsan & Ziesemer, Thomas, 2012. "Migration, Unemployment, and Over-qualification: A Specific-Factors Model Approach," MPRA Paper 43057, University Library of Munich, Germany.
  9. Vallizadeh, Ehsan & Joan, Muysken & Thomas, Ziesemer, 2012. "The impact of medium-skilled immigration: a general equilibrium approach," MPRA Paper 40006, University Library of Munich, Germany.

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