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Overeducation and Instructional Quality: A Theoretical Model and Some Facts

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  • Patrizia Ordine
  • Giuseppe Rose

Abstract

This paper studies educational choices in a signaling setting in the presence of heterogeneous working ability imperfectly correlated with schooling costs. We show that even if individuals can use education to signal their ability, pooling equilibria may arise. These equilibria may be characterized by overeducation depending on firms' technologies. The role of instructional quality may be crucial in determining the emergence of this phenomenon. To find evidence of the main implications of the model, we use data of Italian graduates merged with two data sets from the Italian Ministry of Education and the Italian commission for academic research evaluation. Overeducation appears to be strongly determined by university quality and by other variables that characterize the individual's socioeconomic background. (c) 2009 by The University of Chicago. All rights reserved.

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  • Patrizia Ordine & Giuseppe Rose, 2009. "Overeducation and Instructional Quality: A Theoretical Model and Some Facts," Journal of Human Capital, University of Chicago Press, vol. 3(1), pages 73-105.
  • Handle: RePEc:ucp:jhucap:v:3:y:2009:i:1:p:73-105
    DOI: 10.1086/599836
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    References listed on IDEAS

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    1. 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.
    2. David Andolfatto & Eric Smith, 2001. "Distributional dynamics following a technological revolution," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 34(3), pages 739-759, August.
    3. Charlot, Olivier & Decreuse, Bruno, 2005. "Self-selection in education with matching frictions," Labour Economics, Elsevier, vol. 12(2), pages 251-267, April.
    4. Brunello, Giorgio & Lupi, Claudio & Ordine, Patrizia, 2001. "Widening differences in Italian regional unemployment," Labour Economics, Elsevier, vol. 8(1), pages 103-129, January.
    5. Ordine, Patrizia & Rose, Giuseppe, 2008. "The supply of education quality in a spatial model with asymmetric moving costs," Research in Economics, Elsevier, vol. 62(4), pages 197-214, December.
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