Overeducation of youth and intrahousehold labor market decisions

The mismatch between a worker’s education and the educational level required by his occupation, labeled †educational mismatch†, is increasingly a problem in developing countries, such as Brazil. Overeducated workers, besides the related wage penalty, display lower productivity and satisfaction with their jobs. Youth and recently graduated people are particularly prone to overeducation, which is a trap for their future careers, becoming a persistent status. Available studies on the subject traditionally adopt unitary models for labor market choices. However, these choices are taken in a household context, considering the labor market placement of other household members. Thus, this article examines educational mismatch in the Brazilian labor market, for 18 to 29 years old youth. A binomial logit is adopted, adding a household approach for labor supply. The article analyzes microdata from PNADC (IBGE) between 2012 and 2019, employing the household’s first interview data. It is revealed that young women are less prone to overeducation in terms of odds ratio, while young people living in rural areas are more prone to the condition.