Overeducation and the Earnings of Black, Hispanic, and White Male Workers

Abstract

This study addresses two issues: (1) the impact of overeducation on the earnings of male workers in the United States, and (2) white-minority earnings differences among males. Given that educational attainment levels are increasing among workers, there is some suspicion that earnings returns to education are not as great as might be expected. This topic is examined by including an overeducation variable in an earnings function. Regarding the second issue addressed in this article, little is actually known about white-minority differences because the bulk of such research compares whites and blacks. By including selected Hispanic groups in this analysis (Mexican Americans, Puerto Ricans, Cubans, and Other Hispanics) we are able to assess white-minority earnings differences to a greater degree. Using data from a 5% sample of the 1980 census to estimate an earnings function, we find that overeducated workers earn less than either undereducated or adequately educated workers. Second, we find that there are substantial earnings differences between whites and minorities, and, also, between the five minority groups examined.