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Education-occupation mismatch: Is there an income penalty?

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  • Nordin, Martin

    ()
    (Department of Economics, Lund University)

  • Persson, Inga

    ()
    (Department of Economics, Lund University)

  • Rooth, Dan-Olof

    ()
    (Department of Economics, Lund University)

Abstract

This paper adds to the small literature on the consequences of education-occupation mismatches. It examines the income penalty for field of education – occupation mismatches for men and women with higher education in Sweden and reveals that the penalty for such mismatches is large for both men and women. In fact, it is substantially larger than has been found for the US. Controlling for cognitive ability further establishes that the income penalty is not caused by a sorting by ability, at least for Swedish men. The income penalty for men decreases with work experience which is an indication that education-specific skills and work experience are substitutes to some extent. There is no evidence, though, that the mismatched individuals move to a matching occupation over time. Thus, for some, the income penalty seems to be permanent.

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Bibliographic Info

Paper provided by Lund University, Department of Economics in its series Working Papers with number 2009:1.

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Length: 21 pages
Date of creation: 06 Feb 2009
Date of revision:
Handle: RePEc:hhs:lunewp:2009_001

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Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden
Phone: +46 +46 222 0000
Fax: +46 +46 2224613
Web page: http://www.nek.lu.se/en
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Keywords: Human capital; rate of return; salary wage differentials; educational economics;

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References

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  1. 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.
  2. Sattinger, Michael, 1993. "Assignment Models of the Distribution of Earnings," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 831-80, June.
  3. Battu, H. & Belfield, C. R. & Sloane, P. J., . "Overeducation Among Graduates: A Cohort View," Working Papers 98-03, Department of Economics, University of Aberdeen.
  4. Robst, John, 2007. "Education and job match: The relatedness of college major and work," Economics of Education Review, Elsevier, Elsevier, vol. 26(4), pages 397-407, August.
  5. Martin Nordin, 2008. "Ability and rates of return to schooling—making use of the Swedish enlistment battery test," Journal of Population Economics, Springer, Springer, vol. 21(3), pages 703-717, July.
  6. Séamus McGuinness, 2006. "Overeducation in the Labour Market," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 387-418, 07.
  7. Dolton, Peter & Vignoles, Anna, 2000. "The incidence and effects of overeducation in the U.K. graduate labour market," Economics of Education Review, Elsevier, Elsevier, vol. 19(2), pages 179-198, April.
  8. Rubb, S., 2003. "Overeducation in the labor market: a comment and re-analysis of a meta-analysis," Economics of Education Review, Elsevier, Elsevier, vol. 22(6), pages 621-629, December.
  9. Hartog, Joop & Oosterbeek, Hessel, 1988. "Education, allocation and earnings in the Netherlands: 0verschooling?," Economics of Education Review, Elsevier, Elsevier, vol. 7(2), pages 185-194, April.
  10. Bourdet , Yves & Persson, Inga, 2008. "Overeducation Among Swedish Youth," Working Papers, Lund University, Department of Economics 2008:8, Lund University, Department of Economics.
  11. van Smoorenburg, M. S. M. & van der Velden, R. K. W., 2000. "The training of school-leavers: Complementarity or substitution?," Economics of Education Review, Elsevier, Elsevier, vol. 19(2), pages 207-217, April.
  12. John Robst, 2007. "Education, College Major, and Job Match: Gender Differences in Reasons for Mismatch," Education Economics, Taylor & Francis Journals, vol. 15(2), pages 159-175.
  13. P. J. Sloane & H. Battu & P. T. Seaman, 1999. "Overeducation, undereducation and the British labour market," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 31(11), pages 1437-1453.
  14. Johansson, Mats & Katz, Katarina, 2007. "Wage differences between women and men in Sweden - the impact of skill mismatch," Working Paper Series, IFAU - Institute for Evaluation of Labour Market and Education Policy 2007:13, IFAU - Institute for Evaluation of Labour Market and Education Policy.
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Citations

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Cited by:
  1. Isabelle Chort, 2013. "Migrant network and immigrants’ occupational mismatch," Working Papers DT/2013/04, DIAL (Développement, Institutions et Mondialisation).
  2. 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).
  3. Domadenik, Polona & Farčnik, DaÅ¡a & Pastore, Francesco, 2013. "Horizontal Mismatch in the Labour Market of Graduates: The Role of Signalling," IZA Discussion Papers 7527, Institute for the Study of Labor (IZA).
  4. Kalfa, Eleni & Piracha, Matloob, 2013. "Immigrants' Educational Mismatch and the Penalty of Over-Education," IZA Discussion Papers 7721, Institute for the Study of Labor (IZA).
  5. 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, Elsevier, vol. 32(C), pages 78-91.
  6. Bender, Keith A. & Roche, Kristen, 2013. "Educational mismatch and self-employment," Economics of Education Review, Elsevier, Elsevier, vol. 34(C), pages 85-95.
  7. 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).

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