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Wage effects of cognitive skills and educational mismatch in Europe

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  • 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
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    Cited by:

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    2. 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.
    3. 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.
    4. 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.
    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.

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    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

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