IDEAS home Printed from https://ideas.repec.org/a/wly/soecon/v73y2007i4p901-930.html
   My bibliography  Save this article

A Mismatch Made in Heaven: A Hedonic Analysis of Overeducation and Undereducation

Author

Listed:
  • Daniel P. McMillen
  • Paul T. Seaman
  • Larry D. Singell

Abstract

In this paper, a hedonic pairing process is modeled in which some workers may be overeducated or undereducated as an equilibrium outcome of a dynamic labor market. Undereducated workers are those whose abilities and training permit them to move into a job with higher qualifications, whereas overeducated workers are highly qualified workers who select into lower‐skill, entry‐level jobs that provide the training (or signal) necessary for promotion. The empirical model shows that these pairing types cannot be directly identified in a cross section since all workers are exactly educated during a portion of their career. However, pairing types may be imputed by comparing predicted and observed qualifications of the worker and predicted and observed requirements of the firm. Using a rich cross section and a panel of British working‐age males to identify the pairing types, we confirm the predicted career development patterns with regard to on‐the‐job training, promotion, and wages.

Suggested Citation

  • Daniel P. McMillen & Paul T. Seaman & Larry D. Singell, 2007. "A Mismatch Made in Heaven: A Hedonic Analysis of Overeducation and Undereducation," Southern Economic Journal, John Wiley & Sons, vol. 73(4), pages 901-930, April.
    • Handle: RePEc:wly:soecon:v:73:y:2007:i:4:p:901-930
    DOI: 10.1002/j.2325-8012.2007.tb00810.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/j.2325-8012.2007.tb00810.x
    Download Restriction: no
    File URL: https://libkey.io/10.1002/j.2325-8012.2007.tb00810.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Duncan, Greg J. & Hoffman, Saul D., 1981. "The incidence and wage effects of overeducation," Economics of Education Review, Elsevier, vol. 1(1), pages 75-86, February.
    2. Sicherman, Nachum & Galor, Oded, 1990. "A Theory of Career Mobility," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 169-192, February.
    3. Bauer, Thomas K., 2002. "Educational mismatch and wages: a panel analysis," Economics of Education Review, Elsevier, vol. 21(3), pages 221-229, June.
    4. Richard R. Verdugo & Naomi Turner Verdugo, 1989. "The Impact of Surplus Schooling on Earnings: Some Additional Findings," Journal of Human Resources, University of Wisconsin Press, vol. 24(4), pages 629-643.
    5. Lex Borghans & Andries de Grip (ed.), 2000. "The Overeducated Worker?," Books, Edward Elgar Publishing, number 1860.
    6. van Smoorenburg, M. S. M. & van der Velden, R. K. W., 2000. "The training of school-leavers: Complementarity or substitution?," Economics of Education Review, Elsevier, vol. 19(2), pages 207-217, April.
    7. Sicherman, Nachum, 1991. ""Overeducation" in the Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 9(2), pages 101-122, April.
    8. Robst, John, 1995. "College quality and overeducation," Economics of Education Review, Elsevier, vol. 14(3), pages 221-228, September.
    9. Cohn, Elchanan & Khan, Shahina P., 1995. "The wage effects of overschooling revisited," Labour Economics, Elsevier, vol. 2(1), pages 67-76, March.
    10. Vahey, Shaun P., 2000. "The great Canadian training robbery: evidence on the returns to educational mismatch," Economics of Education Review, Elsevier, vol. 19(2), pages 219-227, April.
    11. Jaeger, David A & Page, Marianne E, 1996. "Degrees Matter: New Evidence on Sheepskin Effects in the Returns to Education," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 733-740, November.
    12. Mendes de Oliveira, M. & Santos, M. C. & Kiker, B. F., 2000. "The role of human capital and technological change in overeducation," Economics of Education Review, Elsevier, vol. 19(2), pages 199-206, April.
    13. P. J. Sloane & H. Battu & P. T. Seaman, 1996. "Overeducation and the formal education/experience and training trade-off," Applied Economics Letters, Taylor & Francis Journals, vol. 3(8), pages 511-515.
    14. Hersch, Joni, 1991. "Education Match and Job Match," The Review of Economics and Statistics, MIT Press, vol. 73(1), pages 140-144, February.
    15. Russell W. Rumberger, 1987. "The Impact of Surplus Schooling on Productivity and Earnings," Journal of Human Resources, University of Wisconsin Press, vol. 22(1), pages 24-50.
    16. Groot, Wim & Oosterbeek, Hessel, 1994. "Earnings Effects of Different Components of Schooling: Human Capital versus Screening," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 317-321, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Iñaki Iriondo & Teodosio Pérez-Amaral, 2013. "The Effect of Educational Mismatch on Wages Using European Panel Data," Working Papers 700, Queen Mary University of London, School of Economics and Finance.
    3. Séamus McGuinness, 2006. "Overeducation in the Labour Market," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 387-418, July.
    4. Dolton, Peter J. & Silles, Mary A., 2008. "The effects of over-education on earnings in the graduate labour market," Economics of Education Review, Elsevier, vol. 27(2), pages 125-139, April.
    5. Iñaki Iriondo & Teodosio Pérez-Amaral, 2013. "The Effect of Educational Mismatch on Wages Using European Panel Data," Working Papers 700, Queen Mary University of London, School of Economics and Finance.
    6. Kampelmann, Stephan & Rycx, François, 2012. "The impact of educational mismatch on firm productivity: Evidence from linked panel data," Economics of Education Review, Elsevier, vol. 31(6), pages 918-931.
    7. Tsai, Yuping, 2010. "Returns to overeducation: A longitudinal analysis of the U.S. labor market," Economics of Education Review, Elsevier, vol. 29(4), pages 606-617, August.
    8. Dieter Verhaest & Eddy Omey, 2006. "The Impact of Overeducation and its Measurement," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 77(3), pages 419-448, July.
    9. repec:kap:iaecre:v:11:y:2005:i:1:p:93-109 is not listed on IDEAS
    10. Lourdes Badillo-Amador & Antonio García-Sánchez & Luis Vila, 2005. "Mismatches in the Spanish Labor Market: Education vs. Competence Match," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 11(1), pages 93-109, February.
    11. Isabel ARAÚJO & Anabela CARNEIRO, 2023. "Educational mismatches of newly hired workers: Short‐ and medium‐term effects on wages," International Labour Review, International Labour Organization, vol. 162(3), pages 355-383, September.
    12. Kiker, B. F. & Santos, Maria C. & de Oliveira, M. Mendes, 1997. "Overeducation and undereducation: Evidence for Portugal," Economics of Education Review, Elsevier, vol. 16(2), pages 111-125, April.
    13. Léné, Alexandre, 2011. "Occupational downgrading and bumping down: The combined effects of education and experience," Labour Economics, Elsevier, vol. 18(2), pages 257-269, April.
    14. L. Cattani & G. Guidetti & G. Pedrini, 2014. "Assessing the incidence and wage effects of overeducation among Italian graduates using a new measure for educational requirements," Working Papers wp939, Dipartimento Scienze Economiche, Universita' di Bologna.
    15. Araújo, Isabel & Carneiro, Anabela, 2020. "Educational Mismatches of Newly Hired Workers: Short and Medium-run Effects on Wages," GLO Discussion Paper Series 668, Global Labor Organization (GLO).
    16. Paula Herrera-Idárraga & Enrique López-Bazo & Elisabet Motellón, 2012. "Informality and overeducation in the labor market of a developing country," Working Papers XREAP2012-20, Xarxa de Referència en Economia Aplicada (XREAP), revised Nov 2012.
    17. Baktash, Mehrzad B., 2023. "Overeducation, Performance Pay and Wages: Evidence from Germany," GLO Discussion Paper Series 1327, Global Labor Organization (GLO).
    18. Frenette, Marc, 2004. "The overqualified Canadian graduate: the role of the academic program in the incidence, persistence, and economic returns to overqualification," Economics of Education Review, Elsevier, vol. 23(1), pages 29-45, February.
    19. Hung, Chia-Yu, 2008. "Overeducation and undereducation in Taiwan," Journal of Asian Economics, Elsevier, vol. 19(2), pages 125-137, April.
    20. Berlingieri, Francesco & Erdsiek, Daniel, 2012. "How relevant is job mismatch for German graduates?," ZEW Discussion Papers 12-075, ZEW - Leibniz Centre for European Economic Research.
    21. Brian Clark & Clément Joubert & Arnaud Maurel, 2017. "The career prospects of overeducated Americans," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-29, December.

    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:soecon:v:73:y:2007:i:4:p:901-930. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)2325-8012 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.