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The Incidence And Wage Effects Of Overeducation: The Case Of Taiwan


  • Chun-Hung A. Lin

    () (Department of Economics, Chinese Culture University)

  • Chun-Hsuan Wang

    (Department of Finance, Ming Chuan University)


This paper, based on data from Survey of Family Income and Expenditure of Taiwan, shows that the recent trends of job match in Taiwan labor market have been marked by increasing proportion of overeducated workers due to the higher education expansion policy, while the incidence of undereducation continues to decline. Furthermore, workers¡¯ economic position is not completely determined by their educational levels. Working experience also plays an important role in workers¡¯ job placement and their wages. Workers with relatively less working experience are more likely to be overeducated, while workers with relatively more working experience are more likely to be undereducated. Overeducated (Undereducated) workers would earn more (less) than their co-workers with adequate education but less (more) than the workers having the same educational level with adequate education for jobs. However, the rewards (penalties) to adequate education and overeducation (undereducation) decline as more experience accumulated. Evidence also shows effect of bumping down from overeducation on the wages and employment of lower educated workers.

Suggested Citation

  • Chun-Hung A. Lin & Chun-Hsuan Wang, 2005. "The Incidence And Wage Effects Of Overeducation: The Case Of Taiwan," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 30(1), pages 31-47, June.
  • Handle: RePEc:jed:journl:v:30:y:2005:i:1:p:31-47

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    References listed on IDEAS

    1. 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.
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    Cited by:

    1. Ching-Yuan Lin & Chun-Hung Lin, 2012. "Does Higher Education Expansion Reduce Credentialism and Gender Discrimination in Education?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 109(2), pages 279-293, November.
    2. Abbi Kedir & Andri Kyrizi & Francisco Martinez-Mora, 2012. "Signalling and Productivity Effects of Overeducation: Is It Really a Waste of Resources?," Discussion Papers in Economics 12/19, Department of Economics, University of Leicester.
    3. Hong-kyun Kim & Seung-jun Park, 2016. "Do Skill Mismatches Create a Wage Penalty? Alternative Estimates for Korea," Asian Economic Journal, East Asian Economic Association, vol. 30(3), pages 295-316, September.
    4. Hung-Lin Tao & Chia-Yu Hung, 2014. "Vertical and Horizontal Educational Mismatches of Female Graduates in Taiwan," Asian Economic Journal, East Asian Economic Association, vol. 28(2), pages 181-199, June.

    More about this item


    Overeducation; Wage; Bumping Down; Labor Market; Taiwan;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials


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