Educational Mismatch and Returns on Human Capital in the Spanish Hospitality and Travel Agency Sectors

Abstract

The authors analyse the returns on human capital and the importance of educational mismatch in determining wages in the Spanish hospitality and the travel agency sectors. In addition, they assess the impact of several job characteristics (business size, full-time contracts and permanent contracts) and personal characteristics (gender and worker nationality) on wages. Using an expanded Mincerian wage equation and data from the 2006 Spanish Wage Structure Survey, they estimate separate regressions for each educational group analysed: overeducated, undereducated and adequately educated workers. The results show that the return on human capital and the real hourly wage may be quantitatively influenced by educational mismatch. Moreover, evidence is presented regarding the impact of firm size on wage returns and the data also reveal wage differentials by the gender and nationality of workers in the Spanish hospitality industry.