This article shows that unfavorable economic conditions at graduation decrease the likelihood of a good job‐worker match over a worker's subsequent career. Mismatch is quantified in terms of overeducation by both industry and occupation. The German Socio‐Economic Panel and region‐level unemployment rates from 1994 to 2012 are used. Instrumental variables estimates account for endogenous graduation timing. A single percentage point increase in regional unemployment causes an increase in the probability of overeducation of 1.6–1.7 percentage points for university graduates. Effects for technical tertiary education and apprenticeship graduates are smaller. Labor market entry conditions affect workers for up to 9 years after graduation. (JEL J23, J22, E32, I23)

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ABSTRACT Linked historical records typically are unrepresentative of the population from which they are drawn even if the method of linking is restricted to time-invariant matching criteria. An example drawn from Canadian census records illustrates the nature of bias that may afflict even a carefully linked sample. The use of potentially time-varying match criteria doubles the size of a linked sample at a modest cost in terms of additional bias. This trade-off is attractive for some research purposes if care is taken in the uses to which the data are put. Reweighting to mitigate the effects of bias in visible characteristics is desirable.

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