Measuring Over‐education

Abstract

Previous work on over-education has assumed homogeneity of workers and jobs. Relaxing these assumptions, we find that over-educated workers have lower education credentials than matched graduates. Among the over-educated graduates we distinguish between the apparently over-educated workers, who have similar unobserved skills as matched graduates, and the genuinely over-educated workers, who have a much lower skill endowment. Overeducation is associated with a pay penalty of 5% -11% for apparently over-educated workers compared with matched graduates and of 22%-26% for the genuinely over-educated. Overeducation originates from the lack of skills of graduates. This should be taken into consideration in the current debate on the future of higher education in the UK.

Educational expansion and the education gradient in health: A hierarchical age-period-cohort analysis

“…For example, lower-educated individuals may report having worse health due to social causation or health selection. Nevertheless, we consider selection less likely, because previous studies (Chandola et al, 2003;Chevalier, 2003) have illustrated that lower education causes worse health, to a greater extent than vice versa. Last, this study could suffer from mortality selection.…”

“…Slightly falling returns on education in the labor market may have reduced the health benefits it provides. Furthermore, over-education has gone hand in hand with the devaluation of educational credentials (Chevalier, 2003;Van de Werfhorst & Andersen, 2005). The worldwide process of educational expansion has resulted in people valuing educational degrees, irrespective of the skills and knowledge acquired, because of the institutionalization of education as a system of legitimation (Meyer, 1977).…”

Overeducation, Skills and Wage Penalty: Evidence for Spain Using PIAAC Data

“…Instead of using a longitudinal framework, Chevalier (2003) analyses cross-sectional data. He creates a proxy of workers' unobserved productivity taking the difference between the estimated and the observed earnings in their first job.…”

The impact of educational mismatch on firm productivity: Evidence from linked panel data

“…Other studies regarding the wage effects of educational mismatch also highlight that, in a given job with a specific level of required education, over-(under-) educated workers earn more (less) than those who have just the required education for the job (Battu et al, 1999, Dolton and Vignoles, 2000, Duncan and Hoffman, 1981, Groot, 1996, Groot and Maassen van den Brink, 2000, Sicherman, 1991, van der Meer, 2006. Although part of this premium (penalty) may be explained by workers' unobserved heterogeneity (Bauer, 2002, Chevalier, 2003, Dolton and Silles, 2008, Frenette, 2004, Lamo and Messina, 2010, McGuinness, 2003, McGuinness and Sloane, 2011, current evidence on the basis of human capital theory thus suggests that over-(under-) education increases (reduces) workers' productivity. 2 Another strand of the literature examines the impact of educational mismatch on job satisfaction and other correlates of workers' productivity (such as absenteeism, shirking, turnover or training).…”