Overeducation and Mismatch in the Labor Market

56 Pages Posted: 1 Mar 2011

See all articles by Edwin Leuven

Edwin Leuven

University of Amsterdam - Faculty of Economics and Business (FEB); IZA Institute of Labor Economics

Hessel Oosterbeek

University of Amsterdam - Research Institute in Economics & Econometrics (RESAM); Tinbergen Institute Amsterdam (TIA); Institute for the Study of Labor (IZA)

Abstract

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.

Keywords: mismatch, overschooling, underschooling, wage equation

JEL Classification: I2

Suggested Citation

Leuven, Edwin and Oosterbeek, Hessel, Overeducation and Mismatch in the Labor Market. IZA Discussion Paper No. 5523, Available at SSRN: https://ssrn.com/abstract=1771245

Edwin Leuven (Contact Author)

University of Amsterdam - Faculty of Economics and Business (FEB) ( email )

Roetersstraat 11
Amsterdam, 1018 WB
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+31 20 525 5241 (Phone)
+31 20 525 4310 (Fax)

IZA Institute of Labor Economics

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Germany

Hessel Oosterbeek

University of Amsterdam - Research Institute in Economics & Econometrics (RESAM) ( email )

Roetersstraat 11
Amsterdam
Netherlands
+31 20 525 4242 (Phone)
+31 20 525 5283 (Fax)

HOME PAGE: http://www.fee.uva.nl/scholar/oosterbeek/

Tinbergen Institute Amsterdam (TIA)

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

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