IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

The impact of educational mismatch on firm productivity: Evidence from linked panel data

Listed author(s):
  • Kampelmann, Stephan
  • Rycx, François

We provide first evidence regarding the direct impact of educational mismatch on firm productivity. To do so, we rely on representative linked employer–employee panel data for Belgium covering the period 1999–2006. Controlling for simultaneity issues, time-invariant unobserved workplace characteristics, cohort effects and dynamics in the adjustment process of productivity, we find that: (i) a higher level of required education exerts a significantly positive influence on firm productivity, (ii) additional years of over-education (both among young and older workers) are beneficial for firm productivity, and (iii) additional years of under-education (among young workers) are detrimental for firm productivity.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sciencedirect.com/science/article/pii/S0272775712000805
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal Economics of Education Review.

Volume (Year): 31 (2012)
Issue (Month): 6 ()
Pages: 918-931

as
in new window

Handle: RePEc:eee:ecoedu:v:31:y:2012:i:6:p:918-931
DOI: 10.1016/j.econedurev.2012.07.003
Contact details of provider: Web page: http://www.elsevier.com/locate/econedurev

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. A. Gautier, Pieter & J. van den Berg, Gerard & C. van Ours, Jan & Ridder, Geert, 2002. "Worker turnover at the firm level and crowding out of lower educated workers," European Economic Review, Elsevier, vol. 46(3), pages 523-538, March.
  2. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-864, October.
  3. Benoît Mahy & François Rycx & Mélanie Volral, 2011. "Does Wage Dispersion Make All Firms Productive?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 58(4), pages 455-489, 09.
  4. D. Verhaest & E. Omey, 2008. "Objective overeducation and worker well-being: a shadow price approach," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 08/514, Ghent University, Faculty of Economics and Business Administration.
  5. Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-1054, July.
  6. Benoit Dostie, 2006. "Wages, Productivity and Aging," Cahiers de recherche 0645, CIRPEE.
  7. Benoît Mahy & François Rycx & Mélanie Volral, 2009. "Wage Dispersion and Firm Productivity in Different Working Environments," DULBEA Working Papers 09-07.RS, ULB -- Universite Libre de Bruxelles.
  8. Fredrik Heyman, 2005. "Pay inequality and firm performance: evidence from matched employer-employee data," Applied Economics, Taylor & Francis Journals, vol. 37(11), pages 1313-1327.
  9. Hartog, Joop, 2000. "Over-education and earnings: where are we, where should we go?," Economics of Education Review, Elsevier, vol. 19(2), pages 131-147, April.
  10. Teulings, Coen & Koopmanschap, Marc, 1989. "An econometric model of crowding out of lower education levels," European Economic Review, Elsevier, vol. 33(8), pages 1653-1664, October.
  11. Duncan, Greg J. & Hoffman, Saul D., 1981. "The incidence and wage effects of overeducation," Economics of Education Review, Elsevier, vol. 1(1), pages 75-86, February.
  12. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
  13. Hibbs, Douglas A, Jr & Locking, Hakan, 2000. "Wage Dispersion and Productive Efficiency: Evidence for Sweden," Journal of Labor Economics, University of Chicago Press, vol. 18(4), pages 755-782, October.
  14. David Roodman, 2006. "How to Do xtabond2: An Introduction to "Difference" and "System" GMM in Stata," Working Papers 103, Center for Global Development.
  15. Arnaud Chevalier & Colm Harmon & Ian Walker & Yu Zhu, 2002. "Does education raise productivity, or just reflect it?," Open Access publications 10197/1104, School of Economics, University College Dublin.
  16. François Rycx & Philip Du Caju & Ilan Tojerow, 2009. "Inter-Industry Wage Differentials :How much does rent sharing matter ?," ULB Institutional Repository 2013/245783, ULB -- Universite Libre de Bruxelles.
  17. Allen, Jim & van der Velden, Rolf, 2001. "Educational Mismatches versus Skill Mismatches: Effects on Wages, Job Satisfaction, and On-the-Job Search," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 434-452, July.
  18. Christian Grund & Niels Westergaard-Nielsen, 2005. "The Dispersion of Employees' Wage Increases and Firm Performance," Bonn Econ Discussion Papers bgse3_2005, University of Bonn, Germany.
  19. Bauer, Thomas K., 2002. "Educational mismatch and wages: a panel analysis," Economics of Education Review, Elsevier, vol. 21(3), pages 221-229, June.
  20. Sattinger, Michael, 1993. "Assignment Models of the Distribution of Earnings," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 831-880, June.
  21. Göbel, Christian & Zwick, Thomas, 2011. "Age and productivity: Sector differences?," ZEW Discussion Papers 11-058, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  22. Séamus McGuinness, 2006. "Overeducation in the Labour Market," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 387-418, 07.
  23. H. Battu & C.R. Belfield & P.J. Sloane, 2000. "How Well Can We Measure Graduate Over- Education and Its Effects?," National Institute Economic Review, National Institute of Economic and Social Research, vol. 171(1), pages 82-93, January.
  24. Pedro S. Martins, 2004. "Rent Sharing Before and After the Wage Bill," Discussion Paper Series, Department of Economics 200405, Department of Economics, University of St. Andrews.
  25. Winter-Ebmer, Rudolf & Zweimüller, Josef, 1997. "Intra-firm Wage Dispersion and Firm Performance," CEPR Discussion Papers 1621, C.E.P.R. Discussion Papers.
  26. John Robst, 1995. "Career Mobility, Job Match, and Overeducation," Eastern Economic Journal, Eastern Economic Association, vol. 21(4), pages 539-550, Fall.
  27. Rusinek, Michael & Rycx, Francois, 2008. "Rent-Sharing under Different Bargaining Regimes: Evidence from Linked Employer-Employee Data," IZA Discussion Papers 3406, Institute for the Study of Labor (IZA).
  28. Lamo, Ana & Messina, Julián, 2010. "Formal Education, Mismatch and Wages after Transition: Assessing the Impact of Unobserved Heterogeneity Using Matching Estimators," IZA Discussion Papers 4982, Institute for the Study of Labor (IZA).
  29. R Blundell & Steven Bond, "undated". "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
  30. Richard R. Verdugo & Naomi Turner Verdugo, 1989. "The Impact of Surplus Schooling on Earnings: Some Additional Findings," Journal of Human Resources, University of Wisconsin Press, vol. 24(4), pages 629-643.
  31. Jan Ours & Lenny Stoeldraijer, 2011. "Age, Wage and Productivity in Dutch Manufacturing," De Economist, Springer, vol. 159(2), pages 113-137, June.
  32. Dolton, Peter & Vignoles, Anna, 2000. "The incidence and effects of overeducation in the U.K. graduate labour market," Economics of Education Review, Elsevier, vol. 19(2), pages 179-198, April.
  33. Khan, Linda J. & Morrow, Paula C., 1991. "Objective and subjective underemployment relationships to job satisfaction," Journal of Business Research, Elsevier, vol. 22(3), pages 211-218, May.
  34. Laroche, P., 2000. "What do Unions do to Productivity? A Meta-Analysis," Papers 2000-5, Groupe de recherche en économie financière et en gestion des entreprises, Universite Nancy 2.
  35. Pierre Cahuc & André Zylberberg, 2004. "Labor Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 026203316x.
  36. Patrick Aubert & Bruno Crépon, 2003. "La productivité des salariés âgés : une tentative d'estimation," Économie et Statistique, Programme National Persée, vol. 368(1), pages 95-119.
  37. Leuven, Edwin & Oosterbeek, Hessel, 2011. "Overeducation and Mismatch in the Labor Market," IZA Discussion Papers 5523, Institute for the Study of Labor (IZA).
  38. P. J. Sloane & H. Battu & P. T. Seaman, 1999. "Overeducation, undereducation and the British labour market," Applied Economics, Taylor & Francis Journals, vol. 31(11), pages 1437-1453.
  39. John G. Riley, 2001. "Silver Signals: Twenty-Five Years of Screening and Signaling," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 432-478, June.
  40. Mary Silles & Peter Dolton, 2002. "The Effects of Over-Education on Earnings in the Graduate Labour Market," Economics Series Working Papers 126, University of Oxford, Department of Economics.
  41. Martins, Pedro S., 2008. "Dispersion in wage premiums and firm performance," Economics Letters, Elsevier, vol. 101(1), pages 63-65, October.
  42. McGuinness, Seamus & Sloane, Peter J., 2009. "Labour Market Mismatch Among UK Graduates: An Analysis Using REFLEX Data," IZA Discussion Papers 4168, Institute for the Study of Labor (IZA).
  43. Akerlof, George A & Yellen, Janet L, 1988. "Fairness and Unemployment," American Economic Review, American Economic Association, vol. 78(2), pages 44-49, May.
  44. Vieira, José A. Cabral, 2005. "Skill mismatches and job satisfaction," Economics Letters, Elsevier, vol. 89(1), pages 39-47, October.
  45. Alessandra Cataldi & Stephan Kampelmann & François Rycx, 2011. "Productivity-Wage Gaps Among Age Groups: Does the ICT Environment Matter?," De Economist, Springer, vol. 159(2), pages 193-221, June.
  46. Frenette, Marc, 2004. "The overqualified Canadian graduate: the role of the academic program in the incidence, persistence, and economic returns to overqualification," Economics of Education Review, Elsevier, vol. 23(1), pages 29-45, February.
  47. Blanchflower, David G. & Bryson, Alex, 2007. "The Wage Impact of Trade Unions in the UK Public and Private Sectors," IZA Discussion Papers 3055, Institute for the Study of Labor (IZA).
  48. van Smoorenburg, M. S. M. & van der Velden, R. K. W., 2000. "The training of school-leavers: Complementarity or substitution?," Economics of Education Review, Elsevier, vol. 19(2), pages 207-217, April.
  49. Steve Bond, 2002. "Dynamic panel data models: a guide to microdata methods and practice," CeMMAP working papers CWP09/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  50. Kenneth R Troske & Kimberly N Bayard & Judith Hellerstein & David Neumark, 1998. "New Evidence On Sex Segregation And Sex Differences In Wages From Matched Employee-Employer Data," Working Papers 98-18, Center for Economic Studies, U.S. Census Bureau.
  51. Levine, David I., 1991. "Cohesiveness, productivity, and wage dispersion," Journal of Economic Behavior & Organization, Elsevier, vol. 15(2), pages 237-255, March.
  52. Jimeno,Juan F. & Felgueroso, Florentino & Dolado, Juan José, 1999. "Youth labour markets in Spain: education, training and crowding-out," UC3M Working papers. Economics 6169, Universidad Carlos III de Madrid. Departamento de Economía.
  53. Thomas Hempell, 2005. "What’s spurious, what’s real? Measuring the productivity impacts of ICT at the firm-level," Empirical Economics, Springer, vol. 30(2), pages 427-464, 09.
  54. Groot, Wim & Maassen van den Brink, Henriette, 2000. "Overeducation in the labor market: a meta-analysis," Economics of Education Review, Elsevier, vol. 19(2), pages 149-158, April.
  55. Milgrom, Paul & Roberts, John, 1990. "The Efficiency of Equity in Organizational Decision Processes," American Economic Review, American Economic Association, vol. 80(2), pages 154-159, May.
  56. D. Verhaest & E. Omey, 2004. "The impact of overeducation and its measurement," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 04/215, Ghent University, Faculty of Economics and Business Administration.
  57. E. Verhofstadt & E. Omey, 2003. "The impact of education on job satisfaction in the first job," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 03/169, Ghent University, Faculty of Economics and Business Administration.
  58. van der Meer, Peter H., 2006. "The validity of two education requirement measures," Economics of Education Review, Elsevier, vol. 25(2), pages 211-219, April.
  59. Nachum Sicherman, 1987. "Over-Education in the Labor Market," University of Chicago - George G. Stigler Center for Study of Economy and State 48, Chicago - Center for Study of Economy and State.
  60. Tsang, Mun Chiu, 1987. "The impact of underutilization of education on productivity: A case study of the U.S. Bell companies," Economics of Education Review, Elsevier, vol. 6(3), pages 239-254, June.
  61. Arnaud Chevalier, 2003. "Measuring Over-education," Economica, London School of Economics and Political Science, vol. 70(279), pages 509-531, 08.
  62. Sicherman, Nachum & Galor, Oded, 1990. "A Theory of Career Mobility," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 169-192, February.
  63. S. Mcguinness, 2003. "Graduate overeducation as a sheepskin effect: evidence from Northern Ireland," Applied Economics, Taylor & Francis Journals, vol. 35(5), pages 597-608.
  64. Bat COCKX & Muriel DEJEMEPPE, 2002. "Do the Higher Educated Unemployed Crowd out the Lower Educated Ones in a Competition for Jobs ?," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2002020, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  65. Felix Buchel & Antje Mertens, 2004. "Overeducation, undereducation, and the theory of career mobility," Applied Economics, Taylor & Francis Journals, vol. 36(8), pages 803-816.
  66. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
  67. Korpi, Tomas & Tåhlin, Michael, 2009. "Educational mismatch, wages, and wage growth: Overeducation in Sweden, 1974-2000," Labour Economics, Elsevier, vol. 16(2), pages 183-193, April.
  68. Russell W. Rumberger, 1987. "The Impact of Surplus Schooling on Productivity and Earnings," Journal of Human Resources, University of Wisconsin Press, vol. 22(1), pages 24-50.
  69. Groot, Wim & Oosterbeek, Hessel, 1994. "Earnings Effects of Different Components of Schooling: Human Capital versus Screening," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 317-321, May.
  70. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, Oxford University Press, vol. 87(3), pages 355-374.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:ecoedu:v:31:y:2012:i:6:p:918-931. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.