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Who is overeducated and why? Probit and dynamic mixed multinomial logit analyses of vertical mismatch in East and West Germany

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  • Christina Boll
  • Julian Sebastian Leppin
  • Klaus Schömann

Abstract

Overeducation potentially signals a productivity loss. With Socio-Economic Panel data from 1984 to 2011 we identify drivers of educational mismatch for East and West medium and highly educated Germans. Addressing measurement error, state dependence and unobserved heterogeneity, we run dynamic mixed multinomial logit models for three different measures of educational mismatch. We find that overeducation is mainly state dependent. Results largely hinge on the selected specification. Yet, robust results are that employment experience decreases and past unemployment increases the mismatch risk. An employer change seldomly serves as a suitable escape strategy, nor does a dual qualification save graduates from entering overeducation.

Suggested Citation

  • Christina Boll & Julian Sebastian Leppin & Klaus Schömann, 2016. "Who is overeducated and why? Probit and dynamic mixed multinomial logit analyses of vertical mismatch in East and West Germany," Education Economics, Taylor & Francis Journals, vol. 24(6), pages 639-662, November.
    • Handle: RePEc:taf:edecon:v:24:y:2016:i:6:p:639-662
    DOI: 10.1080/09645292.2016.1158787
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    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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