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Overeducation at a glance. Determinants and wage effects of the educational mismatch, looking at the AlmaLaurea data

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  • Floro Ernesto Caroleo
  • Francesco Pastore

Abstract

This paper provides the first available estimates of the impact of overeducation on wages of AlmaLaurea university graduates. The analysis focuses on jobs held 5 years after the graduation attained in 2005. Overeducation / overskilling are relatively high when compared to those in similarly advanced economies, and persistent over the years after graduation. Ceteris paribus they tend to be more frequent among children of parents with lower educational levels, through school tracking. The degrees more frequently associated to overeducation are: Agriculture, Arts, Education, Languages, Physical Education, Political Sciences, and Psychology. Working while studying and having started the university later than the curricular years are also factors. Moreover, we estimate a conditional wage penalty of about 10% of the median wage when we adopt the "to get" (overeducation) and of about 6.7% when we adopt the "to do" (overskilling) definition. However, the personal attributes that dispose individuals to be mismatched might also reduce the probability of finding a job. Controlling for this source of sample selection bias by using the Heckit procedure, we find that the wage penalty associated to overeducation / overskilling goes up to 35 and 74 percent, respectively. This is support for the job competition and the job assignment models versus the search theoretical model, suggesting that the non-employed would be more likely overeducated / overskilled if they found a job.

Suggested Citation

  • Floro Ernesto Caroleo & Francesco Pastore, 2012. "Overeducation at a glance. Determinants and wage effects of the educational mismatch, looking at the AlmaLaurea data," Discussion Papers 18_2012, CRISEI, University of Naples "Parthenope", Italy.
  • Handle: RePEc:crj:dpaper:18_2012
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    More about this item

    Keywords

    School-to-Work Transition; University graduates; AlmaLaurea; Overeducation; Overskilling; Earnings; (Ordered) Probit; sample selection bias; Heckit; Italy.;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • I2 - Health, Education, and Welfare - - Education
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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