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Overeducation in developing economies: How can we test for it, and what does it mean?

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  • Mehta, Aashish
  • Felipe, Jesus
  • Quising, Pilipinas
  • Camingue, Sheila

Abstract

A worker is said to be overeducated if he/she has acquired more education than is required to perform his/her job. In the absence of data measuring the number of years of schooling required to perform particular jobs, we propose a new approach to testing for overeducation. Overeducation is confirmed if we observe that education levels rose in jobs that offer very low returns to education and that underwent little technological change. Using labor force surveys from four developing countries, we find evidence of overeducation in unskilled jobs in the Philippines, mild evidence in Mexico, and little evidence in India and Thailand. We show that a job's mean and modal years of schooling are poor proxies for required education. We also show that overeducation sometimes increases within unskilled jobs, even while a growing share of educated workers enter skilled jobs. This may be because the quality of education segments the labor market.

Suggested Citation

  • Mehta, Aashish & Felipe, Jesus & Quising, Pilipinas & Camingue, Sheila, 2011. "Overeducation in developing economies: How can we test for it, and what does it mean?," Economics of Education Review, Elsevier, vol. 30(6), pages 1334-1347.
  • Handle: RePEc:eee:ecoedu:v:30:y:2011:i:6:p:1334-1347
    DOI: 10.1016/j.econedurev.2011.06.004
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    References listed on IDEAS

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    Cited by:

    1. Paula Herrera-Idárraga & Enrique López-Bazo & Elisabet Motellón, 2012. "Informality and overeducation in the labor market of a developing country," Working Papers XREAP2012-20, Xarxa de Referència en Economia Aplicada (XREAP), revised Nov 2012.
    2. Paula Herrera-Idárraga & Enrique López-Bazo & Elisabet Motellón, 2015. "Double Penalty in Returns to Education: Informality and Educational Mismatch in the Colombian Labour Market," Journal of Development Studies, Taylor & Francis Journals, vol. 51(12), pages 1683-1701, December.
    3. Carroll, David & Tani, Massimiliano, 2013. "Over-education of recent higher education graduates: New Australian panel evidence," Economics of Education Review, Elsevier, vol. 32(C), pages 207-218.
    4. Tani, Massimiliano, 2012. "Does immigration policy affect the education--occupation mismatch? Evidence from Australia," Australian Bulletin of Labour, National Institute of Labour Studies, vol. 38(2), pages 111-141.
    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, vol. 32(C), pages 78-91.
    6. Sasiwimon Warunsiri Paweenawat & Jessica Vechbanyongratana, 2015. "Wage Consequences of Rapid Tertiary Education Expansion in a Developing Economy: The Case of Thailand," The Developing Economies, Institute of Developing Economies, vol. 53(3), pages 218-231, September.
    7. David Carroll & Massimiliano Tani, 2015. "Job search as a determinant of graduate over-education: evidence from Australia," Education Economics, Taylor & Francis Journals, vol. 23(5), pages 631-644, October.
    8. Michael J. Handel & Alexandria Valerio & Maria Laura Sánchez Puerta, 2016. "Accounting for Mismatch in Low- and Middle-Income Countries," World Bank Publications, The World Bank, number 24906.
    9. Kaewkwan Tangtipongkul, 2015. "Rates of Return to Schooling in Thailand," Asian Development Review, MIT Press, vol. 32(2), pages 38-64, September.
    10. Hai Zhong, 2013. "Does Education Expansion Increase Intergenerational Mobility?," Economica, London School of Economics and Political Science, vol. 80(320), pages 760-773, October.

    More about this item

    Keywords

    Returns to education; Human capital; Economic development;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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