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Are educational mismatches responsible for the ‘inequality increasing effect’ of education?

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  • Budria, Santiago

Abstract

This paper asks whether educational mismatches can account for the positive association between education and wage inequality found in the data. We use two different data sources, the European Community Household Panel and the Portuguese Labour Force Survey, and consider several types of mismatch, including overqualification, underqualification and skills mismatch. We test our hypothesis using two different measurement methods, the ‘statistical’ and the ‘subjective’ approach. The results are robust to the different choices and unambiguously show that the positive effect of education on wage inequality is not due to the prevalence of educational mismatches in the labour market.

Suggested Citation

  • Budria, Santiago, 2010. "Are educational mismatches responsible for the ‘inequality increasing effect’ of education?," MPRA Paper 23420, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:23420
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    Cited by:

    1. Seamus McGuinness & Konstantinos Pouliakas & Paul Redmond, 2018. "Skills Mismatch: Concepts, Measurement And Policy Approaches," Journal of Economic Surveys, Wiley Blackwell, vol. 32(4), pages 985-1015, September.
    2. Chenhong Peng & Paul Siu Fai Yip & Yik Wa Law, 2019. "Intergenerational Earnings Mobility and Returns to Education in Hong Kong: A Developed Society with High Economic Inequality," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 143(1), pages 133-156, May.
    3. Maqbool H. Sial & Ghulam Sarwar & Mubashra Saeed, 2019. "Surplus Education and Earnings Differentials in Pakistan: A Quantile Regression Analysis," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 24(2), pages 93-114, July-Dec.

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    More about this item

    Keywords

    Overeducation; returns to education; educational mismatch; within-groups wage inequality;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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