Educational Mismatch and Wages in Germany

25 Pages Posted: 29 Mar 2000

See all articles by Thomas K. Bauer

Thomas K. Bauer

Rhine-Westphalia Institute for Economic Research (RWI-Essen); University of Bochum - Faculty of Economics; IZA Institute of Labor Economics

Date Written: December 1999

Abstract

This paper contributes to the literature considering the wage effects of educational mismatch in Germany. It uses a large German panel data set for the period from 1984 to 1997 and stresses the importance of controlling for unobserved heterogeneity when analyzing the labor market effects of over- and undereducation. Using pooled OLS, the estimation results confirm those found in the existing literature. The estimated differences between adequately and inadequately educated workers become smaller or disappear totally, when controlling for unobserved heterogeneity. In contrast to the common results using only cross-sectional data, the human capital model could not be rejected once controlling for unobserved heterogeneity.

JEL Classification: I21, J31

Suggested Citation

Bauer, Thomas K., Educational Mismatch and Wages in Germany (December 1999). Available at SSRN: https://ssrn.com/abstract=219870

Thomas K. Bauer (Contact Author)

Rhine-Westphalia Institute for Economic Research (RWI-Essen) ( email )

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