Overeducation and Mismatch in the Labor Market
University of Amsterdam - Faculty of Economics and Business (FEB); Institute for the Study of Labor (IZA)
University of Amsterdam - Research Institute in Economics & Econometrics (RESAM); Tinbergen Institute Amsterdam (TIA); Institute for the Study of Labor (IZA)
IZA Discussion Paper No. 5523
This paper surveys the economics literature on overeducation. The original motivation to study this topic were reports that the strong increase in the number of college graduates in the early 1970s in the US led to a decrease in the returns to college education. We argue that Duncan and Hoffman's augmented wage equation the workhorse model in the overeducation literature in which wages are regressed on years of overschooling, years of required schooling and years of underschooling is at best loosely related to this original motivation. We discuss measurement and estimation issues and give an overview of the main empirical findings in this literature. Finally we given an appraisal of the economic lessons learned.
Number of Pages in PDF File: 56
Keywords: mismatch, overschooling, underschooling, wage equation
JEL Classification: I2working papers series
Date posted: March 1, 2011
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