IDEAS home Printed from https://ideas.repec.org/a/eee/jpolmo/v39y2017i5p909-927.html
   My bibliography  Save this article

Wage effects of cognitive skills and educational mismatch in Europe

Author

Listed:
  • Mateos Romero, Lucía
  • Murillo Huertas, Inés P.
  • Salinas Jiménez, Mª del Mar

Abstract

This paper analyzes the returns to education and educational mismatch in thirteen European countries taking account not only of years of education but also of cognitive skills actually acquired by workers. Using the PIAAC database, our results suggest that both years of education and skills contribute to determine wages, with higher returns to years of education as the level of skills increases. Educational and skills mismatches appear to be two different phenomena, with educational mismatch lying behind wages. It is also found that the higher the level of skills achieved by an individual, the higher the returns to years of required education or to years of overeducation. Policy implications are derived as regards educational mismatch, which reflects inefficiencies in the allocation of the educational resources, and as regards the relevance of cognitive skills, leaving room for improving the quality of education to fully take advantage of educational investments.

Suggested Citation

  • Mateos Romero, Lucía & Murillo Huertas, Inés P. & Salinas Jiménez, Mª del Mar, 2017. "Wage effects of cognitive skills and educational mismatch in Europe," Journal of Policy Modeling, Elsevier, vol. 39(5), pages 909-927.
  • Handle: RePEc:eee:jpolmo:v:39:y:2017:i:5:p:909-927
    DOI: 10.1016/j.jpolmod.2017.08.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0161893817300868
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.jpolmod.2017.08.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. McIntosh, Steven & Vignoles, Anna, 2001. "Measuring and Assessing the Impact of Basic Skills on Labour Market Outcomes," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 453-481, July.
    2. 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.
    3. 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.
    4. Salinas-Jimenez, M Mar & Alvarez-Ayuso, Inmaculada & Delgado-Rodriguez, M Jesus, 2006. "Capital accumulation and TFP growth in the EU: A production frontier approach," Journal of Policy Modeling, Elsevier, vol. 28(2), pages 195-205, February.
    5. 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.
    6. Sattinger, Michael, 1993. "Assignment Models of the Distribution of Earnings," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 831-880, June.
    7. Séamus McGuinness, 2006. "Overeducation in the Labour Market," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 387-418, July.
    8. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4, National Bureau of Economic Research, Inc.
    9. Green, David A. & Craig Riddell, W., 2003. "Literacy and earnings: an investigation of the interaction of cognitive and unobserved skills in earnings generation," Labour Economics, Elsevier, vol. 10(2), pages 165-184, April.
    10. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    11. Eric A. Hanushek & Ludger Woessmann, 2008. "The Role of Cognitive Skills in Economic Development," Journal of Economic Literature, American Economic Association, vol. 46(3), pages 607-668, September.
    12. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, September.
    13. Annabi, Nabil & Harvey, Simon & Lan, Yu, 2011. "Public expenditures on education, human capital and growth in Canada: An OLG model analysis," Journal of Policy Modeling, Elsevier, vol. 33(6), pages 852-865.
    14. Jerik Hanushek & Dennis Kimko, 2006. "Schooling, Labor-force Quality, and the Growth of Nations," Voprosy obrazovaniya / Educational Studies Moscow, National Research University Higher School of Economics, issue 1, pages 154-193.
    15. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863, Elsevier.
    16. Theodore W. Schultz, 1960. "Capital Formation by Education," Journal of Political Economy, University of Chicago Press, vol. 68, pages 571-571.
    17. Meroni, Elena Claudia & Vera-Toscano, Esperanza & Costa, Patricia, 2015. "Can low skill teachers make good students? Empirical evidence from PIAAC and PISA," Journal of Policy Modeling, Elsevier, vol. 37(2), pages 308-323.
    18. Borghans, Lex & Green, Francis & Mayhew, Ken, 2001. "Skills Measurement and Economic Analysis: An Introduction," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 375-384, July.
    19. Iriondo, Iñaki & Pérez-Amaral, Teodosio, 2016. "The effect of educational mismatch on wages in Europe," Journal of Policy Modeling, Elsevier, vol. 38(2), pages 304-323.
    20. Colm Harmon & Hessel Oosterbeek & Ian Walker, 2003. "The Returns to Education: Microeconomics," Journal of Economic Surveys, Wiley Blackwell, vol. 17(2), pages 115-156, April.
    21. Francis Green & Steven McIntosh, 2007. "Is there a genuine under-utilization of skills amongst the over-qualified?," Applied Economics, Taylor & Francis Journals, vol. 39(4), pages 427-439.
    22. Giorgio Di Pietro & Peter Urwin, 2006. "Education and skills mismatch in the Italian graduate labour market," Applied Economics, Taylor & Francis Journals, vol. 38(1), pages 79-93.
    23. Pedraja-Chaparro, Francisco & Santín, Daniel & Simancas, Rosa, 2015. "Determinants of grade retention in France and Spain: Does birth month matter?," Journal of Policy Modeling, Elsevier, vol. 37(5), pages 820-834.
    24. Murillo, Inés P. & Rahona-López, Marta & Salinas-Jiménez, Maria del Mar, 2012. "Effects of educational mismatch on private returns to education: An analysis of the Spanish case (1995–2006)," Journal of Policy Modeling, Elsevier, vol. 34(5), pages 646-659.
    25. Arnaud Chevalier, 2003. "Measuring Over-education," Economica, London School of Economics and Political Science, vol. 70(279), pages 509-531, August.
    26. Robert J. Barro, 2001. "Human Capital and Growth," American Economic Review, American Economic Association, vol. 91(2), pages 12-17, May.
    27. 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)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yenchun Jim Wu & Chih-Hung Yuan & Chia-I Pan, 2018. "Entrepreneurship Education: An Experimental Study with Information and Communication Technology," Sustainability, MDPI, Open Access Journal, vol. 10(3), pages 1-13, March.
    2. Lucía Mateos-Romero & María del Mar Salinas-Jiménez, 2018. "Labor Mismatches: Effects on Wages and on Job Satisfaction in 17 OECD Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 140(1), pages 369-391, November.
    3. Inmaculada García-Mainar & Víctor M. Montuenga-Gómez, 2020. "Over-Qualification and the Dimensions of Job Satisfaction," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 147(2), pages 591-620, January.
    4. Flisi, Sara & Goglio, Valentina & Meroni, Elena Claudia & Vera-Toscano, Esperanza, 2019. "Cohort patterns in adult literacy skills: How are new generations doing?," Journal of Policy Modeling, Elsevier, vol. 41(1), pages 52-65.
    5. Garcia-Mainar, Inmaculada & Montuenga, Victor M., 2019. "The signalling role of over-education and qualifications mismatch," Journal of Policy Modeling, Elsevier, vol. 41(1), pages 99-119.
    6. Queralt Capsada-Munsech, 2019. "Measuring Overeducation: Incidence, Correlation and Overlaps Across Indicators and Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 145(1), pages 279-301, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lucia Mateos & Ines Murillo & Maria del Mar Salinas, 2014. "Desajuste educativo y competencias cognitivas: efectos sobre los salarios," Hacienda Pública Española / Review of Public Economics, IEF, vol. 210(3), pages 85-108, September.
    2. Sandra Nieto & Raul Ramos, 2017. "Overeducation, Skills and Wage Penalty: Evidence for Spain Using PIAAC Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 134(1), pages 219-236, October.
    3. L. Cattani & G. Guidetti & G. Pedrini, 2014. "Assessing the incidence and wage effects of overeducation among Italian graduates using a new measure for educational requirements," Working Papers wp939, Dipartimento Scienze Economiche, Universita' di Bologna.
    4. Rolf van der Velden & Mark Levels & Jim Allen, 2014. "Educational mismatches and skills: New empirical tests of old hypotheses," Investigaciones de Economía de la Educación volume 9, in: Adela García Aracil & Isabel Neira Gómez (ed.), Investigaciones de Economía de la Educación 9, edition 1, volume 9, chapter 34, pages 655-680, Asociación de Economía de la Educación.
    5. Shujaat Farooq, 2015. "Job Mismatches in Pakistan: Is there Some Wage Penalty to Graduates?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 54(2), pages 147-164.
    6. Garcia-Mainar, Inmaculada & Montuenga, Victor M., 2019. "The signalling role of over-education and qualifications mismatch," Journal of Policy Modeling, Elsevier, vol. 41(1), pages 99-119.
    7. Lucía Mateos-Romero & María del Mar Salinas-Jiménez, 2018. "Labor Mismatches: Effects on Wages and on Job Satisfaction in 17 OECD Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 140(1), pages 369-391, November.
    8. Lucía Mateos-Romero & María del Mar Salinas-Jiménez, 2017. "Skills Heterogeneity Among Graduate Workers: Real and Apparent Overeducation in the Spanish Labor Market," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 132(3), pages 1247-1264, July.
    9. Barbara Ermini & Luca Papi & Francesca Scaturro, 2017. "An Analysis of the Determinants of Over-Education Among Italian Ph.D Graduates," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 3(2), pages 167-207, July.
    10. Inmaculada García-Mainar & Víctor M. Montuenga-Gómez, 2017. "Subjective educational mismatch and signalling in Spain," Documentos de Trabajo dt2017-03, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza.
    11. Morsy, Hanan & Mukasa, Adamon, 2019. "Youth Jobs, Skill and Educational Mismatches in Africa," MPRA Paper 100394, University Library of Munich, Germany.
    12. Hanan Morsy & Adamon N. Mukasa, 2019. "Working Paper 326 - Youth Jobs, Skill and Educational Mismatches in Africa," Working Paper Series 2452, African Development Bank.
    13. Maria Ferreira & Annemarie Künn-Nelen & Andries De Grip, 2017. "Work-Related Learning and Skill Development in Europe: Does Initial Skill Mismatch Matter?," Research in Labor Economics, in: Solomon W. Polachek & Konstantinos Pouliakas & Giovanni Russo & Konstantinos Tatsiramos (ed.), Skill Mismatch in Labor Markets, volume 45, pages 345-407, Emerald Publishing Ltd.
    14. Inés P. Murillo & José L. Raymond & Jorge Calero, 2017. "Efficiency in the transformation of schooling into competences: A cross-country analysis using PIAAC data," Working Papers 2017/12, Institut d'Economia de Barcelona (IEB).
    15. Wu, Na & Wang, Qunyong, 2018. "Wage penalty of overeducation: New micro-evidence from China," China Economic Review, Elsevier, vol. 50(C), pages 206-217.
    16. Jorge Calero & Inés P. Murillo Huertas & José L. Raymond, 2021. "Efficiency in the transformation of schooling into competences: A cross‐country analysis using PIAAC data," Bulletin of Economic Research, Wiley Blackwell, vol. 73(2), pages 252-275, April.
    17. Kampelmann, Stephan & Rycx, François, 2012. "The impact of educational mismatch on firm productivity: Evidence from linked panel data," Economics of Education Review, Elsevier, vol. 31(6), pages 918-931.
    18. Joaquin Turmo-Garuz & M.-Teresa Bartual-Figueras & Francisco-Javier Sierra-Martinez, 2019. "Factors Associated with Overeducation Among Recent Graduates During Labour Market Integration: The Case of Catalonia (Spain)," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 144(3), pages 1273-1301, August.
    19. Oliver Fabel & Razvan Pascalau, 2013. "Recruitment of Seemingly Overeducated Personnel: Insider--Outsider Effects on Fair Employee Selection Practices," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 20(1), pages 57-82, February.
    20. Eric Hanushek & Ludger Woessmann, 2012. "Do better schools lead to more growth? Cognitive skills, economic outcomes, and causation," Journal of Economic Growth, Springer, vol. 17(4), pages 267-321, December.

    More about this item

    Keywords

    Educational mismatch; Cognitive skills; Educational performance;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jpolmo:v:39:y:2017:i:5:p:909-927. 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: . General contact details of provider: http://www.elsevier.com/locate/inca/505735 .

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505735 .

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.