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Educational Mismatches and Earnings: Extensions of Occupational Mobility Theory and Evidence of Human Capital Depreciation

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  • Stephen Rubb

Abstract

Using a human capital theory framework, this study examines the impact of educational mismatches on earnings and occupational mobility. Occupational mobility theory suggests that overeducated workers observe greater upward occupational mobility and undereducated workers observe lower upward occupational mobility. By extension, this leads to relatively high earnings growth for overeducated workers and relatively low earnings growth for undereducated workers. Moreover, overeducated workers are probably transient relative to their undereducated counterparts, so employers have few incentives to invest in their human capital. Accordingly, their experience will be rewarded at lower rates. These results may also occur if the unused human capital of overeducated workers depreciates with nonuse. The data verify these predictions. Insights on the link between experience and educational mismatches are also examined.

Suggested Citation

  • Stephen Rubb, 2006. "Educational Mismatches and Earnings: Extensions of Occupational Mobility Theory and Evidence of Human Capital Depreciation," Education Economics, Taylor & Francis Journals, vol. 14(2), pages 135-154.
  • Handle: RePEc:taf:edecon:v:14:y:2006:i:2:p:135-154
    DOI: 10.1080/09645290600622905
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    References listed on IDEAS

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    9. James W. Albrecht & Per-Anders Edin & Marianne Sundström & Susan B. Vroman, 1999. "Career Interruptions and Subsequent Earnings: A Reexamination Using Swedish Data," Journal of Human Resources, University of Wisconsin Press, vol. 34(2), pages 294-311.
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    Citations

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    Cited by:

    1. Altorjai, Szilvia, 2013. "Over-qualification of immigrants in the UK," ISER Working Paper Series 2013-11, Institute for Social and Economic Research.
    2. Baert, Stijn & Cockx, Bart & Verhaest, Dieter, 2013. "Overeducation at the start of the career: Stepping stone or trap?," Labour Economics, Elsevier, vol. 25(C), pages 123-140.
    3. Galasi, Péter, 2009. "A túl- és az alulképzés bérhozama 25 európai országban
      [Returns for over-education and under-education for 25 European countries]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(3), pages 197-215.
    4. Peter Galasi, 2008. "The effect of educational mismatch on wages for 25 countries," Budapest Working Papers on the Labour Market 0808, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
    5. Michael Quinn & Stephen Rubb, 2011. "Spouse Overeducation and Family Migration: Evidence from the US," Journal of Family and Economic Issues, Springer, vol. 32(1), pages 36-45, March.
    6. Theo Sparreboom & Alexander Tarvid, 2016. "Imbalanced Job Polarization and Skills Mismatch in Europe," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 49(1), pages 15-42, July.
    7. Saxena, Richa & Bhatnagar, Deepti, 2013. "Soaring on wings of aspiration and support: A study of married Indian women professionals staying away from families to pursue higher studies," IIMA Working Papers WP2013-10-04, Indian Institute of Management Ahmedabad, Research and Publication Department.

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