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Unemployment or Overeducation: Which is a Worse Signal to Employers?

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  • Stijn Baert

    () (Ghent University, University of Antwerp, Université catholique de Louvain, GLO, IMISCOE and IZA)

  • Dieter Verhaest

    () (KU Leuven (Brussels Campus) and Ghent University)

Abstract

Abstract This study estimates the stigma effect of unemployment and overeducation within one framework. We conduct a randomised field experiment in which we send out trios of fictitious job applications, from male candidates with no relevant work experience, to real vacancies. One candidate graduated just a few months before the application, the two others graduated a year earlier and had been unemployed or underemployed since that time. By monitoring the subsequent callback, we find evidence of a larger stigma effect of unemployment than overeducation. The stigma effect of overeducation is found to occur for permanent contract jobs but not for temporary ones.

Suggested Citation

  • Stijn Baert & Dieter Verhaest, 2019. "Unemployment or Overeducation: Which is a Worse Signal to Employers?," De Economist, Springer, vol. 167(1), pages 1-21, March.
  • Handle: RePEc:kap:decono:v:167:y:2019:i:1:d:10.1007_s10645-018-9330-2
    DOI: 10.1007/s10645-018-9330-2
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    Cited by:

    1. Kampelmann, Stephan & Mahy, Benoît & Rycx, Francois & Vermeylen, Guillaume, 2016. "Who Is Your Perfect Match? Educational Norms, Educational Mismatch and Firm Profitability," IZA Discussion Papers 10399, Institute of Labor Economics (IZA).
    2. repec:oup:oxecpp:v:70:y:2018:i:4:p:994-1015. is not listed on IDEAS
    3. Emmanuel Duguet & Rémi Le Gall & Yannick L'horthy & Pascale Petit, 2018. "How does labor market history influence the access to hiring interviews?," Working Papers halshs-01878933, HAL.
    4. Van Belle, Eva & Caers, Ralf & De Couck, Marijke & Di Stasio, Valentina & Baert, Stijn, 2017. "Why Is Unemployment Duration a Sorting Criterion in Hiring?," IZA Discussion Papers 10876, Institute of Labor Economics (IZA).
    5. 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.
    6. John M. Nunley & Adam Pugh & Nicholas Romero & Richard Alan Seals, Jr., 2015. "Unemployment, Underemployment, and Employment Opportunities: Results from a Correspondence Audit," Auburn Economics Working Paper Series auwp2015-13, Department of Economics, Auburn University.
    7. repec:spr:jlabrs:v:52:y:2018:i:1:d:10.1186_s12651-018-0239-7 is not listed on IDEAS
    8. Alessandra Pasquini & Marco Centra & Guido Pellegrini, 2018. "Long-Term Unemployed hirings: Should targeted or untargeted policies be preferred?," Papers 1802.03343, arXiv.org, revised May 2018.
    9. repec:eee:labeco:v:48:y:2017:i:c:p:120-143 is not listed on IDEAS
    10. Maurer-Fazio, Margaret & Wang, Sili, 2018. "Does Marital Status Affect How Firms Interpret Job Applicants' Un/Employment Histories?," IZA Discussion Papers 11363, Institute of Labor Economics (IZA).
    11. Seamus McGuinness & Adele Bergin & Adele Whelan, 2018. "Overeducation in Europe: trends, convergence, and drivers," Oxford Economic Papers, Oxford University Press, vol. 70(4), pages 994-1015.
    12. Baert, Stijn & Neyt, Brecht & Siedler, Thomas & Tobback, Ilse & Verhaest, Dieter, 2019. "Student Internships and Employment Opportunities after Graduation: A Field Experiment," IZA Discussion Papers 12183, Institute of Labor Economics (IZA).
    13. Verhaest, Dieter & Bogaert, Elene & Dereymaeker, Jeroen & Mestdagh, Laura & Baert, Stijn, 2016. "Crowding Out in the Labour Market: Do Employers Lend a Hand?," IZA Discussion Papers 9654, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    Unemployment signalling; Overeducation signalling; Transitions in youth;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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