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Overeducation and Wages in Europe: Evidence from Quantile Regression

Author

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  • Ana I Moro-Egido
  • Santiago BudrÌa

Abstract

The overeducation literature has typically assumed that the effect of overeducation on wages is constant across the conditional wage distribution. In this paper we use quantile regression and data from 12 European countries to show that differences across segments of the distribution are indeed large. Moreover, we investigate to what extent overeducation is related to (the lack of) unobserved skills. By differentiating between segments of the distribution, we discriminate between groups of workers with different skills. We find that the detrimental effects of overeducation among the high-skilled are even larger than among the low-skilled. This finding lends support to the view that overeducation is an event that reduces the workerÌs potential productivity, regardless of his skills.

Suggested Citation

  • Ana I Moro-Egido & Santiago BudrÌa, "undated". "Overeducation and Wages in Europe: Evidence from Quantile Regression," Studies on the Spanish Economy 229, FEDEA.
  • Handle: RePEc:fda:fdaeee:229
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    References listed on IDEAS

    as
    1. van der Meer, Peter & Wielers, Rudi, 1996. "Educational Credentials and Trust in the Labor Market," Kyklos, Wiley Blackwell, vol. 49(1), pages 29-46.
    2. 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.
    3. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, Oxford University Press, vol. 87(3), pages 355-374.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Low skills: why worry?
      by chris dillow in Stumbling and Mumbling on 2013-10-09 16:54:28
    2. Poverty: structural or individual?
      by chris dillow in Stumbling and Mumbling on 2014-08-01 18:07:18

    Citations

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    Cited by:

    1. Ghignoni, Emanuela & Verashchagina, Alina, 2014. "Educational qualifications mismatch in Europe. Is it demand or supply driven?," Journal of Comparative Economics, Elsevier, pages 670-692.
    2. Lamo, Ana & Messina, Julián, 2010. "Formal education, mismatch and wages after transition: Assessing the impact of unobserved heterogeneity using matching estimators," Economics of Education Review, Elsevier, vol. 29(6), pages 1086-1099, December.
    3. Kelly, Elish & O'Connell, Philip J. & Smyth, Emer, 2010. "The economic returns to field of study and competencies among higher education graduates in Ireland," Economics of Education Review, Elsevier, pages 650-657.
    4. Hong-Kyun Kim & Seung C. Ahn & Jihye Kim, 2012. "Vertical and Horizontal Education-Job Mismatches in the Korean Youth Labor Market : A Quantile Regression Approach," Working Papers 1201, Research Institute for Market Economy, Sogang University.
    5. Alessandro Tampieri, 2010. "The Sex and the Uni: Educational Assortative Matching the Over-Education," Discussion Papers in Economics 10/05, Department of Economics, University of Leicester.
    6. Kim, Hong-Kyun & Ahn, Seung C. & Kim, Jihye, 2016. "The Income Penalty Of Vertical And Horizontal Education-Job Mismatches In The Korean Youth Labor Market: A Quantile Regression Approach," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 57(1), pages 67-90, June.

    More about this item

    JEL classification:

    • C29 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Other
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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