Abstract
The overeducation literature has typically assumed that the effect of overeducation on wages is constant across the conditional wage distribution. In this paper we use quantile regression and data from a group of European countries to show that differences across segments of the distribution are indeed large. We find significant differences between sexes, in the sense that it is not true that in countries where men are penalised more severely, women are also severely penalised. Moreover, different trends are observed depending on the country and sex. For example in Germany, the wage penalty for overeducation is higher among women than men. Furthermore, while the wage penalty for men increases from decile 10 to decile 90, the wage penalty decreases for women. In Spain, women are more severely penalised for overeducation than men and the effect of overeducation is quite homogeneous across deciles for both men and women.
Highlights
Investment in human capital is a key element of economic progress
Recent research has shown that a great many countries have a significant number of workers with surplus schooling, that is, workers whose education exceeds their particular job requirements
The literature has focused primarily on determining the wage effects associated to overeducation and, secondarily, on verifying if these effects are due to the lack of adequate jobs or if instead they are a result of the lack of basic skills in workers classified as overeducated
Summary
Investment in human capital is a key element of economic progress. recent research has shown that a great many countries have a significant number of workers with surplus schooling, that is, workers whose education exceeds their particular job requirements. A variant of the TCH, known as the Theory of Career Mobility (TCM, Galor and Sicherman, 1990), suggests that workers with high levels of formal education accept positions for which they are apparently overeducated while they gain experience and specific human capital through on-the-job training. This permits them to subsequently move into positions where they can utilise their qualifications, either within the same firm or at a different one. While the Theory of Job Matching (Jovanovic, 1979) supports this view, it attempts to determine if the costs of job search and imperfect information are reason enough to explain the existence of inefficient assignment
Sign-in/Register to view highlights & summary 
Published Version (
Free)
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call