Overeducation in Developing Economies: How Can We Test for It, and What Does It Mean?

28 Pages Posted: 14 Aug 2010 Last revised: 31 Jul 2015

See all articles by Aashish Mehta

Aashish Mehta

University of California, Santa Barbara

Jesus Felipe

Asian Development Bank

Pile Quising

Asian Development Bank - Economic Research

Sheila Camingue

Asian Development Bank

Date Written: January 15, 2011

Abstract

A worker is said to be overeducated if he/she has acquired more education than is required to perform his/her job. In the absence of data measuring the number of years of schooling required to perform particular jobs, we propose a new approach to testing for overeducation. Overeducation is confirmed by rising education levels in jobs that offer very low returns to education and underwent little technological change. We find evidence of overeducation in technologically stagnant unskilled jobs in the Philippines, mild evidence in Mexico, and little evidence in India and Thailand. We show that a job’s mean and modal years of schooling are poor proxies for required education. We also show that overeducation sometimes increases within technologically stagnant unskilled jobs, even while skill biased technological change pulls other workers into jobs offering higher returns to schooling. This may be because the quality of education segments the labor market.

Keywords: Returns to education; human capital, economic development

JEL Classification: I21, J24, J33

Suggested Citation

Mehta, Aashish Sunil and Felipe, Jesus and Quising, Pile and Camingue, Sheila, Overeducation in Developing Economies: How Can We Test for It, and What Does It Mean? (January 15, 2011). Economics of Education Review, Vol. 30(6), pp. 1334 - 1347, 2011. Available at SSRN: https://ssrn.com/abstract=1658474 or http://dx.doi.org/10.2139/ssrn.1658474

Aashish Sunil Mehta (Contact Author)

University of California, Santa Barbara ( email )

Santa Barbara, CA 93106
United States

HOME PAGE: http://www.global.ucsb.edu/people/aashish-mehta

Jesus Felipe

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Pile Quising

Asian Development Bank - Economic Research ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Sheila Camingue

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

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