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Educational mismatches and skills: New empirical tests of old hypotheses

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  • Allen J.P.
  • Velden R.K.W. van der
  • Levels M.

    (GSBE)

Abstract

In this paper, we empirically explore how the often reported relationship between overeducation and wages can best be understood. Exploiting the newly published Programme for International Assessment of Adult Competencies PIAAC data OECD 2013, we are able to achieve a better estimation of the classical ORU-model Duncan and Hoffman, 1981, by controlling for heterogeneity of observable skills. Our findings suggest that 1 a considerable part of the effect of educational mismatches can be attributed to skills heterogeneity, and 2 that the extent to which skills explain educational mismatches varies by institutional contexts. These observations suggest that skills matter for explaining wage effects of education and educational mismatches, but the extent to which this is the case also depends on institutional contexts.

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File URL: http://pub.maastrichtuniversity.nl/07278325-0609-444d-a58e-cd77da000946
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Bibliographic Info

Paper provided by Maastricht University, Graduate School of Business and Economics (GSBE) in its series Research Memorandum with number 062.

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Date of creation: 2013
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Handle: RePEc:unm:umagsb:2013062

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Web page: http://www.maastrichtuniversity.nl/
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Related research

Keywords: Analysis of Education; Education and Economic Development; Labor Demand; Human Capital; Skills; Occupational Choice; Labor Productivity;

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