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Overeducation, earnings and job satisfaction among graduates in China

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  • Jones, Melanie
  • Kaya, Ezgi
  • Nan, Jiarui

Abstract

Using nationally representative longitudinal data from the China Family Panel Studies (2014–2020), this paper examines the relationship between overeducation, earnings and job satisfaction among graduates in China. We find consistent evidence of wage and job satisfaction penalties across multiple established measures of overeducation, even after accounting for personal and work-related characteristics. Although widely discussed in the literature, differences in academic subject and cognitive and non-cognitive skills account for only a modest part of the pay penalty. Controlling for time-invariant unobserved heterogeneity reduces the size of overeducation pay penalties and, in several cases, removes their statistical significance, suggesting the role of other forms of unobserved individual heterogeneity.

Suggested Citation

  • Jones, Melanie & Kaya, Ezgi & Nan, Jiarui, 2025. "Overeducation, earnings and job satisfaction among graduates in China," China Economic Review, Elsevier, vol. 93(C).
    • Handle: RePEc:eee:chieco:v:93:y:2025:i:c:s1043951x25001063
    DOI: 10.1016/j.chieco.2025.102448
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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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