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Educational mismatches and skills: New empirical tests of old hypotheses

In: Investigaciones de Economía de la Educación 9

Author

Listed:
  • Rolf van der Velden

    () (ROA/ Maatricht University)

  • Mark Levels

    () (ROA/Maastricht University)

  • Jim Allen

    () (ROA/Maastricht University)

Abstract

In this paper, we empirically explore how the often reported relationship between overeducation and wages can best be understood. Exploiting the newly published Programme for International Assessment of Adult Competencies (PIAAC) data (OECD 2013), we are able to achieve a better estimation of the classical ORU-model (Duncan and Hoffman, 1981), by controlling for heterogeneity of observable skills. Our findings suggest that 1) a considerable part of the effect of educational mismatches can be attributed to skills heterogeneity, and 2) that the extent to which skills explain educational mismatches varies by institutional contexts. These observations suggest that skills matter for explaining wage effects of education and educational mismatches, but the extent to which this is the case also depends on institutional contexts.

Suggested Citation

  • Rolf van der Velden & Mark Levels & Jim Allen, 2014. "Educational mismatches and skills: New empirical tests of old hypotheses," Investigaciones de Economía de la Educación volume 9,in: Adela García Aracil & Isabel Neira Gómez (ed.), Investigaciones de Economía de la Educación 9, edition 1, volume 9, chapter 34, pages 655-680 Asociación de Economía de la Educación.
  • Handle: RePEc:aec:ieed09:09-34
    as

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    File URL: http://repec.economicsofeducation.com/2014valencia/09-34.pdf
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    References listed on IDEAS

    as
    1. Hartog, Joop & Oosterbeek, Hessel, 1988. "Education, allocation and earnings in the Netherlands: 0verschooling?," Economics of Education Review, Elsevier, vol. 7(2), pages 185-194, April.
    2. Francis Green & Steven McIntosh, 2007. "Is there a genuine under-utilization of skills amongst the over-qualified?," Applied Economics, Taylor & Francis Journals, vol. 39(4), pages 427-439.
    3. Hartog, Joop, 2000. "Over-education and earnings: where are we, where should we go?," Economics of Education Review, Elsevier, vol. 19(2), pages 131-147, April.
    4. 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.
    5. Sicherman, Nachum, 1991. ""Overeducation" in the Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 9(2), pages 101-122, April.
    6. 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.
    7. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, December.
    8. Sattinger, Michael, 1993. "Assignment Models of the Distribution of Earnings," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 831-880, June.
    9. F Green & Steven McIntosh & Anna Vignoles, 1999. "Overeducation and Skills - Clarifying the Concepts," CEP Discussion Papers dp0435, Centre for Economic Performance, LSE.
    10. Séamus McGuinness, 2006. "Overeducation in the Labour Market," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 387-418, July.
    11. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters,in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
    12. Hersch, Joni, 1991. "Education Match and Job Match," The Review of Economics and Statistics, MIT Press, vol. 73(1), pages 140-144, February.
    13. Glenda Quintini, 2011. "Over-Qualified or Under-Skilled: A Review of Existing Literature," OECD Social, Employment and Migration Working Papers 121, OECD Publishing.
    14. Groot, Wim & Maassen van den Brink, Henriette, 2000. "Overeducation in the labor market: a meta-analysis," Economics of Education Review, Elsevier, vol. 19(2), pages 149-158, April.
    15. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, Oxford University Press, vol. 87(3), pages 355-374.
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    Citations

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    Cited by:

    1. Sandra Nieto, 2015. "Overeducation, skills and wage penalty: Evidence for Spain using PIAAC data," Investigaciones de Economía de la Educación volume 10,in: Marta Rahona López & Jennifer Graves (ed.), Investigaciones de Economía de la Educación 10, edition 1, volume 10, chapter 30, pages 597-616 Asociación de Economía de la Educación.
    2. repec:cep:cverdp:003 is not listed on IDEAS
    3. repec:oup:cesifo:v:63:y:2017:i:3:p:255-269. is not listed on IDEAS
    4. Igna, Ioana A., 2018. "The effects of educational mismatch on inventor productivity. Evidence from Sweden, 2003-2010," Papers in Innovation Studies 2018/8, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    5. Franziska Hampf & Ludger Woessmann, 2017. "Vocational vs. General Education and Employment over the Life Cycle: New Evidence from PIAAC," CESifo Economic Studies, CESifo, vol. 63(3), pages 255-269.
    6. van der Velden, Rolf & Bijlsma, Ineke, 2017. "Skill effort: A new theoretical perspective on the relation between skills, skill use, mismatches, and wages," ROA Research Memorandum 005, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    7. Guillermo Montt, 2017. "Field-of-study mismatch and overqualification: labour market correlates and their wage penalty," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-20, December.
    8. repec:bla:asiaec:v:30:y:2016:i:4:p:375-400 is not listed on IDEAS
    9. Sellami Sana & Verhaest Dieter & Nonneman Walter & Van Trier Walter, 2017. "The Impact of Educational Mismatches on Wages: The Influence of Measurement Error and Unobserved Heterogeneity," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 17(1), pages 1-20, February.
    10. repec:esr:qecsas:2017:win:redmond is not listed on IDEAS
    11. repec:esr:forcas:qec2017win is not listed on IDEAS
    12. repec:spr:soinre:v:134:y:2017:i:1:d:10.1007_s11205-016-1423-1 is not listed on IDEAS

    More about this item

    Keywords

    overeducation; skills; heterogeneous skills theory; labour market institutions;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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