Overeducation among graduates in developing countries: What impact on economic growth?

This article analyzes the impact of graduates' overeducation on economic growth in thirty-eight developing countries. A combination of macro data from the World Bank and micro data from the the Integrated Public Use Microdata Series International (IPUMSI) is employed. To deal with unobserved heterogeneity between countries and endogeneity of overeducation, two-stage least squares regression with country �fixed effects is estimated. Results highlight that a high rate of overeducated graduates is estimated to have a negative impact on economic growth at both short and medium terms. The expansion of higher education sector in developing countries should be realized with a deep attention on the education-job matching process among graduates.