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Educational mismatches and skills: new empirical tests of old hypotheses

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  • Mark Levels
  • Rolf van der Velden
  • Jim Allen

Abstract

This article empirically explores how the often reported relationship between educational mismatches and wages can best be understood. Exploiting the newly published Programme for International Assessment of Adult Competencies (PIAAC) data, we are able to achieve a better estimation of the classical Duncan and Hoffman ORU model than previous papers by controlling for heterogeneity of observable skills. Our findings suggest that (i) a considerable part of the effect of educational mismatches can be attributed to skills heterogeneity, and (ii) that the extent to which skills explain educational mismatches varies by institutional contexts, particularly the extent to which collective wage bargaining is regulated. These observations suggest that skills matter for explaining wage effects of education and educational mismatches, but also that the extent to which this is the case depends on collective wage bargaining.

Suggested Citation

  • Mark Levels & Rolf van der Velden & Jim Allen, 2014. "Educational mismatches and skills: new empirical tests of old hypotheses," Oxford Economic Papers, Oxford University Press, vol. 66(4), pages 959-982.
  • Handle: RePEc:oup:oxecpp:v:66:y:2014:i:4:p:959-982.
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    File URL: http://hdl.handle.net/10.1093/oep/gpu024
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    References listed on IDEAS

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    1. Hartog, Joop & Oosterbeek, Hessel, 1988. "Education, allocation and earnings in the Netherlands: 0verschooling?," Economics of Education Review, Elsevier, vol. 7(2), pages 185-194, April.
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    4. 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.
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    9. Glenda Quintini, 2011. "Over-Qualified or Under-Skilled: A Review of Existing Literature," OECD Social, Employment and Migration Working Papers 121, OECD Publishing.
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    12. Sicherman, Nachum, 1991. ""Overeducation" in the Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 9(2), pages 101-122, April.
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    Cited by:

    1. repec:esr:qecsas:2017:win:redmond is not listed on IDEAS
    2. repec:spr:soinre:v:134:y:2017:i:1:d:10.1007_s11205-016-1423-1 is not listed on IDEAS
    3. repec:bla:asiaec:v:30:y:2016:i:4:p:375-400 is not listed on IDEAS
    4. repec:oup:cesifo:v:63:y:2017:i:3:p:255-269. is not listed on IDEAS
    5. Franziska Hampf & Ludger Woessmann, 2017. "Vocational vs. General Education and Employment over the Life Cycle: New Evidence from PIAAC," CESifo Economic Studies, CESifo, vol. 63(3), pages 255-269.
    6. van der Velden, Rolf & Bijlsma, Ineke, 2017. "Skill effort: A new theoretical perspective on the relation between skills, skill use, mismatches, and wages," ROA Research Memorandum 005, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    7. Igna, Ioana A., 2018. "The effects of educational mismatch on inventor productivity. Evidence from Sweden, 2003-2010," Papers in Innovation Studies 2018/8, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    8. Sellami Sana & Verhaest Dieter & Nonneman Walter & Van Trier Walter, 2017. "The Impact of Educational Mismatches on Wages: The Influence of Measurement Error and Unobserved Heterogeneity," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 17(1), pages 1-20, February.
    9. Sandra Nieto, 2015. "Overeducation, skills and wage penalty: Evidence for Spain using PIAAC data," Investigaciones de Economía de la Educación volume 10,in: Marta Rahona López & Jennifer Graves (ed.), Investigaciones de Economía de la Educación 10, edition 1, volume 10, chapter 30, pages 597-616 Asociación de Economía de la Educación.
    10. repec:cep:cverdp:003 is not listed on IDEAS
    11. repec:esr:forcas:qec2017win is not listed on IDEAS
    12. Guillermo Montt, 2017. "Field-of-study mismatch and overqualification: labour market correlates and their wage penalty," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-20, December.

    More about this item

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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