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Much Ado About Nothing? The Wage Effect of Holding a Ph.D. Degree But Not a Ph.D. Job Position

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  • Gaeta, Giuseppe Lucio

    (University of Naples L’Orientale)

  • Lubrano Lavadera, Giuseppe

    (University of Salerno)

  • Pastore, Francesco

    (Università della Campania Luigi Vanvitelli)

Abstract

This paper contributes to the literature on overeducation by empirically investigating its effects on wages among Ph.D. holders. We analyze data collected in 2009 by the Italian National Institute of Statistics (ISTAT) through a large cross-sectional survey of Ph.D. recipients that allowed us observing their work placement few years after the completion of their studies. We extend previous contributions by providing an analysis based on the identification of genuine overeducation as resulting from the interaction of respondents' assessments that concern the usefulness of their Ph.D. title in order to get and to carry out their current job. The potential endogeneity of self-reported genuine overeducation is corrected by using an instrumental variables approach where the provincial incidence of overeducation among those that share the same educational profile of respondents is used as instrument. Our results suggest that genuine over-education is particularly detrimental for individual wages. It leads to a wage penalty of about between 23% and 25%, more than twice bigger than average, a sizeable gap for the country's compressed wage structure. These results allow us to better understanding the effects of job-education mismatch and provide some useful insights into the evaluation of the career outcomes of doctoral graduates.

Suggested Citation

  • Gaeta, Giuseppe Lucio & Lubrano Lavadera, Giuseppe & Pastore, Francesco, 2016. "Much Ado About Nothing? The Wage Effect of Holding a Ph.D. Degree But Not a Ph.D. Job Position," IZA Discussion Papers 10051, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10051
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    Cited by:

    1. Barbara Ermini & Luca Papi & Francesca Scaturro, 2017. "An Analysis of the Determinants of Over-Education Among Italian Ph.D Graduates," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 3(2), pages 167-207, July.
    2. Pastore, Francesco, 2018. "New Education Models for the Workforce of the Future," IZA Policy Papers 143, Institute of Labor Economics (IZA).
    3. Pastore, Francesco, 2018. "New Education Models for the Future of Work Force," GLO Discussion Paper Series 267, Global Labor Organization (GLO).
    4. Floro Ernesto Caroleo & Francesco Pastore, 2018. "Overeducation at a Glance. Determinants and Wage Effects of the Educational Mismatch Based on AlmaLaurea Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 137(3), pages 999-1032, June.
    5. Alfano, Vincenzo & Cicatiello, Lorenzo & Gaeta, Giuseppe Lucio & Pinto, Mauro, 2019. "The gender wage gap among PhD holders: an empirical examination based on Italian data," GLO Discussion Paper Series 393, Global Labor Organization (GLO).

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    More about this item

    Keywords

    job-education mismatch; genuine overeducation; overskilling; job satisfaction; wages; Ph.D. holders;
    All these keywords.

    JEL classification:

    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I26 - Health, Education, and Welfare - - Education - - - Returns to 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
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy

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