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Are Educational Mismatches Responsible for the ‘Inequality Increasing Effect’ of Education?

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  • Santiago Budría

    ()

Abstract

This paper asks whether educational mismatches can account for the positive association between education and wage inequality found in the data. We use two different data sources, the European Community Household Panel and the Portuguese Labour Force Survey, and consider several types of mismatch, including overqualification, underqualification and skills mismatch. We test our hypothesis using two different measurement methods, the ‘statistical’ and the ‘subjective’ approach. The results are robust to the different choices and unambiguously show that the positive effect of education on wage inequality is not due to the prevalence of educational mismatches in the labour market.

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File URL: http://hdl.handle.net/10.1007/s11205-010-9675-7
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Article provided by Springer in its journal Social Indicators Research.

Volume (Year): 102 (2011)
Issue (Month): 3 (July)
Pages: 409-437

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Handle: RePEc:spr:soinre:v:102:y:2011:i:3:p:409-437
Contact details of provider: Web page: http://www.springer.com/economics/journal/11135

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Keywords: Overeducation; Returns to education; Educational mismatch; Within-groups wage inequality;

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Find related papers by JEL classification:
  • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
  • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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