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Overeducation and earnings: some further paneldata evidence

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  • Verhaest, Dieter

    () (Hogeschool-Universiteit Brussel (HUB), Belgium)

  • Omey, Eddy

    (Universiteit Gent, Belgium)

Abstract

It is generally found that overeducated workers earn less than adequately educated workers with similar years of education. We investigate whether this finding may be attributed to worker heterogeneity on the basis of panel data for Flemish school leavers and job analysis measurement. The estimated overeducation penalty at labour market entry diminishes but remains statistically significant after the inclusion of individual fixed effects. Yet, this penalty is found to drop with years of work experience. Our outcomes suggest that this drop results at least partly from the selection of overeducated individuals into better paying industries and firms.

Suggested Citation

  • Verhaest, Dieter & Omey, Eddy, 2009. "Overeducation and earnings: some further paneldata evidence," Working Papers 2009/08, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
  • Handle: RePEc:hub:wpecon:200908
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    References listed on IDEAS

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    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. Rubb, S., 2003. "Overeducation in the labor market: a comment and re-analysis of a meta-analysis," Economics of Education Review, Elsevier, vol. 22(6), pages 621-629, December.
    4. Pedro Telhado Pereira & Pedro Silva Martins, 2004. "Returns to education and wage equations," Applied Economics, Taylor & Francis Journals, vol. 36(6), pages 525-531.
    5. 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.
    6. Dieter Verhaest & Eddy Omey, 2006. "Discriminating between alternative measures of over-education," Applied Economics, Taylor & Francis Journals, vol. 38(18), pages 2113-2120.
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    Cited by:

    1. Marco Pecoraro, 2014. "Is There Still a Wage Penalty for Being Overeducated But Well-matched in Skills? A Panel Data Analysis of a Swiss Graduate Cohort," LABOUR, CEIS, vol. 28(3), pages 309-337, September.
    2. Bender, Keith A. & Roche, Kristen, 2013. "Educational mismatch and self-employment," Economics of Education Review, Elsevier, vol. 34(C), pages 85-95.

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