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Over-education of recent higher education graduates: New Australian panel evidence

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  • Carroll, David
  • Tani, Massimiliano

Abstract

This study investigates the incidence of over-education amongst recent Australian bachelor degree graduates and its effect on their earnings. We find that between 24% and 37% of graduates were over-educated shortly after course completion, with over-education most common amongst young females and least common amongst older females. Over-education rates vary markedly across major fields of study and appear to be associated with the relative demand for graduate labour. Overeducation was less common three years after course completion; however a nontrivial proportion of graduates remain over-educated. With regard to the effect of over-education on earnings, we find a notable age-related effect not reported in earlier studies. Young over-educated graduates were not penalised after unobserved heterogeneity had been addressed, whereas older over-educated graduates were at an earnings disadvantage relative to their well-matched peers.

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  • 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.
    • Handle: RePEc:eee:ecoedu:v:32:y:2013:i:c:p:207-218
    DOI: 10.1016/j.econedurev.2012.10.002
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    4. Floro Ernesto Caroleo & Francesco Pastore, 2018. "Overeducation at a Glance. Determinants and Wage Effects of the Educational Mismatch Based on AlmaLaurea Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 137(3), pages 999-1032, June.
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    9. Cristian Darío Castillo Robayo & Javier García Estévez, 2019. "Desempleo juvenil en Colombia: ¿la educación importa?," Revista Finanzas y Politica Economica, Universidad Católica de Colombia, vol. 11(1), pages 101-101, February.
    10. Antonio Di Paolo & Ferran Mañé, 2014. "“Are we wasting our talent? Overqualification and overskilling among PhD graduates”," IREA Working Papers 201426, University of Barcelona, Research Institute of Applied Economics, revised Oct 2014.
    11. Meroni, Elena Claudia & Vera-Toscano, Esperanza, 2017. "The persistence of overeducation among recent graduates," Labour Economics, Elsevier, vol. 48(C), pages 120-143.
    12. Doon, Roshnie, 2021. "Overeducation in Trinidad and Tobago's Labour Market: A Quantile Regression Approach," GLO Discussion Paper Series 822, Global Labor Organization (GLO).
    13. 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.
    14. Antonio Di Paolo & Ferran Mañé, 2016. "Misusing our talent? Overeducation, overskilling and skill underutilisation among Spanish PhD graduates," The Economic and Labour Relations Review, , vol. 27(4), pages 432-452, December.
    15. Antonios Maragakis & Andy van den Dobbelsteen & Alexandros Maragakis, 2016. "Stakeholders Perceptions of a Universal Sustainability Assessment in Higher Education - A Review of Empirical Evidence," International Journal of Higher Education, Sciedu Press, vol. 5(4), pages 247-247, November.
    16. Dipanwita Sarkar & Trevor C. Collier, 2019. "Does host-country education mitigate immigrant inefficiency? Evidence from earnings of Australian university graduates," Empirical Economics, Springer, vol. 56(1), pages 81-106, January.
    17. Denise Jackson, 2020. "Accounting and Finance Graduate Employment Outcomes: Underemployment, Self‐employment and Managing Diversity," Australian Accounting Review, CPA Australia, vol. 30(3), pages 193-205, September.
    18. Sheruni De Alwis & Nick Parr & Fei Guo, 2020. "The Education–Occupation (Mis)Match of Asia-Born Immigrants in Australia," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 39(3), pages 519-548, June.
    19. Georgiana Camelia Cretan, 2014. "Public higher education and labour market in the Romanian agro-food sector– what is to be done?," International Conference on Competitiveness of Agro-food and Environmental Economy Proceedings, The Bucharest University of Economic Studies, vol. 3, pages 70-80.
    20. Sucharita Ghosh & Emanuele Grassi, 2020. "Overeducation and overskilling in the early careers of PhD graduates: Does international migration reduce labour market mismatch?," Papers in Regional Science, Wiley Blackwell, vol. 99(4), pages 915-944, August.
    21. Agustí Segarra & Mercedes Teruel & Miquel Angel Bove, 2014. "A territorial approach to R&D subsidies: Empirical evidence for Catalonian firms," Working Papers XREAP2014-07, Xarxa de Referència en Economia Aplicada (XREAP), revised Sep 2014.
    22. Giuseppe Lucio Gaeta & Giuseppe Lubrano Lavadera & Francesco Pastore, 2022. "The Effect of Job–Education Vertical Mismatch on Wages Among Recent PhD Graduates: Evidence From an Instrumental Variable Analysis," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 8(1), pages 197-225, March.
    23. Verbruggen, M. & van Emmerik, H. & van Gils, A.E.J. & Meng, C.M. & de Grip, A., 2015. "Does early-career underemployment impact future career success? A path dependency perspective," ROA Research Memorandum 007, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    24. Seamus McGuinness & Delma Byrne, 2015. "Born abroad and educated here: examining the impacts of education and skill mismatch among immigrant graduates in Europe," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-30, December.
    25. Zhu Rong & Chen Linfeng, 2016. "Overeducation, Overskilling and Mental Well-being," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(4), pages 1-33, October.

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    More about this item

    Keywords

    Over-education; Graduate labour market; Human capital;
    All these keywords.

    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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