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“Double Penalty in Returns to Education: Informality and Educational Mismatch in the Colombian Labour market”

Author

Listed:
  • Paula Herrera

    (Faculty of Economics, University of Barcelona)

  • Enrique López-Bazo

    (Faculty of Economics, University of Barcelona)

  • Elisabet Motellón

    (Faculty of Economics, University of Barcelona)

Abstract

This paper examines the returns to education taking into consideration the existence of educational mismatches in the formal and informal employment of a developing country. Results show that the returns of surplus, required and deficit years of schooling are different in the two sectors. Moreover, they suggest that these returns vary along the wage distribution, and that the pattern of variation differs for formal and informal workers. In particular, informal workers face not only lower returns to their education, but suffer a second penalty associated with educational mismatches that puts them at a greater disadvantage compare to their formal counterparts.

Suggested Citation

  • Paula Herrera & Enrique López-Bazo & Elisabet Motellón, 2013. "“Double Penalty in Returns to Education: Informality and Educational Mismatch in the Colombian Labour market”," IREA Working Papers 201307, University of Barcelona, Research Institute of Applied Economics, revised May 2013.
  • Handle: RePEc:ira:wpaper:201307
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    2. Shweta Bahl & Ajay Sharma, 2024. "Informality, education-occupation mismatch, and wages: evidence from India," Applied Economics, Taylor & Francis Journals, vol. 56(19), pages 2260-2294, April.
    3. Ana Tribin & Karen García-Rojas & Paula Herrera-Idarraga & Leonardo Fabio Morales & Natalia Ramirez-Bustamante, 2023. "Shecession: The Downfall of Colombian Women During the Covid-19 Pandemic," Feminist Economics, Taylor & Francis Journals, vol. 29(4), pages 158-193, October.
    4. Cedrick Kalemasi Mosengo & Christian Zamo Akono, 2024. "Effect of Informal Employment on Overeducation in Developing Countries with a focus on the Democratic Republic of Congo (DRC)," Working Papers 24/004, European Xtramile Centre of African Studies (EXCAS).
    5. Tareq Sadeq, 2014. "Formal-Informal Gap in Return to Schooling and Penalty to Education-Occupation Mismatch a Comparative Study for Egypt, Jordan, and Palestine," Working Papers 894, Economic Research Forum, revised Dec 2014.
    6. Cedrick Kalemasi Mosengo & Christian Zamo Akono, 2024. "Effect of Informal Employment on Overeducation in Developing Countries with a focus on the Democratic Republic of Congo (DRC)," Working Papers of the African Governance and Development Institute. 24/004, African Governance and Development Institute..
    7. Karen García-Rojas & Paula Herrera-Idárraga & Leonardo Fabio Morales & Natalia Ramírez-Bustamante & Ana María Tribín-Uribe, 2020. "(She)cession: The Colombian female staircase fall," Borradores de Economia 1140, Banco de la Republica de Colombia.

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    Keywords

    Educational Mismatch; Formal/Informal Employment; Economic Development; Wage Gap. JEL classification: O17; J21; J24.;
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