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Overeducation, major mismatch, and return to higher education tiers: Evidence from novel data source of a major online recruitment platform in China

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  • Zheng, Yanqiao
  • Zhang, Xiaoqi
  • Zhu, Yu

Abstract

We develop a novel approach to study overeducation by extracting pre-match information from online recruitment platforms using word segmentation and dictionary building techniques, which can offer significant advantages over traditional survey-based approaches in objectiveness, timeliness, sample sizes, area coverage and richness of controls. We apply this method to China, which has experienced a 10-fold expansion of its higher education sector over the last two decades. We find that about half of online job-seekers in China are two or more years overeducated, resulting in 5.1% pay penalty. However, the effect of overeducation on pay varies significantly by college quality, city type, and the match of college major with industry. Graduates in STEM (Science, Technology, Engineering and Mathematics) or LEM (Law, Economics and Management) from Key Universities are much less likely to be overeducated in the first place, and actually enjoy a significant pay premium even when they are in the situation.

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  • Zheng, Yanqiao & Zhang, Xiaoqi & Zhu, Yu, 2021. "Overeducation, major mismatch, and return to higher education tiers: Evidence from novel data source of a major online recruitment platform in China," China Economic Review, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:chieco:v:66:y:2021:i:c:s1043951x2100002x
    DOI: 10.1016/j.chieco.2021.101584
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    Cited by:

    1. Zhu,Yu & Xu, Lei, 2022. "Returns to Higher Education - Graduate and Discipline Premiums," GLO Discussion Paper Series 1091, Global Labor Organization (GLO).
    2. Issofou Njifen & Peter Smith, 2024. "Education-Job Mismatch and Heterogeneity in the Return to Schooling: Evidence from Cameroon," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 860-887, March.
    3. Hao, Zedong & Wang, Yun, 2022. "Education signaling, effort investments, and the market's expectations: Theory and experiment on China's higher education expansion," China Economic Review, Elsevier, vol. 75(C).
    4. Xiong, Weiyan & Yang, Jiale & Shen, Wenqin, 2022. "Higher education reform in China: A comprehensive review of policymaking, implementation, and outcomes since 1978," China Economic Review, Elsevier, vol. 72(C).
    5. Doon, Roshnie, 2021. "The Effects of Overeducation on Wages in Trinidad and Tobago: An Unconditional Quantile Regression Analysis," GLO Discussion Paper Series 797, Global Labor Organization (GLO).
    6. Gu, Xiang & Hua, Sheng & McKenzie, Tom & Zheng, Yanqiao, 2022. "Like father, like son? Parental input, access to higher education, and social mobility in China," China Economic Review, Elsevier, vol. 72(C).
    7. Yuanyuan Teng, 2022. "Economic and Spatial Integration of Land-Lost Households in Inland China: Evidence from a Survey in Nanchang City," Sustainability, MDPI, vol. 15(1), pages 1-19, December.
    8. Huang, Bin & Li, Bo & Walker, Ian & Zhu, Yu, 2022. "Does It Pay to Attend More Selective High Schools? Regression Discontinuity Evidence from China," IZA Discussion Papers 15756, Institute of Labor Economics (IZA).
    9. Jiang, Shengjun & Guo, Yilan, 2022. "Reasons for college major-job mismatch and labor market outcomes: Evidence from China," China Economic Review, Elsevier, vol. 74(C).
    10. Sun, Ting & Bian, Xuezi & Liu, Jianxu & Wang, Rui & Sriboonchitta, Songsak, 2023. "The economic and social effects of skill mismatch in China: A DSGE model with skill and firm heterogeneity," Economic Modelling, Elsevier, vol. 125(C).
    11. Liu, Zijun & Chen, Sheng & Tang, Tingting & Luo, Hang & Guan, Qinghao, 2024. "How public education investment and advanced human capital structure affect regional innovation: A spatial econometric analysis from the perspective of innovation value chain," Socio-Economic Planning Sciences, Elsevier, vol. 91(C).
    12. Jones, Melanie K. & Kaya, Ezgi & Nan, Jiarui, 2024. "Overeducation, Earnings and Job Satisfaction among Graduates in China," IZA Discussion Papers 17161, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Overeducation; Online recruitment data; Major-industry mismatch; China;
    All these keywords.

    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education

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