Estimating the Returns to Educational Mismatch with Panel Data: The Role of Unobserved Heterogeneity

IRES Discussion Papers 2011-36, UCLouvain

27 Pages Posted: 16 Jul 2013

Date Written: June 20, 2011

Abstract

Using longitudinal data from the Swiss Household Panel, this analysis suggests that the cross-sectional estimates of the returns to educational mismatch are significantly biased when unobserved heterogeneity is omitted in the wage equation. The results of the standard fixed effects model indeed demonstrate that the wage returns to education are independent of the job requirements. Hence, this empirical analysis supports the human capital interpretation of the Swiss labour market.

Keywords: Educational mismatch, wages, panel data analysis, human capital

Suggested Citation

Pecoraro, Marco, Estimating the Returns to Educational Mismatch with Panel Data: The Role of Unobserved Heterogeneity (June 20, 2011). IRES Discussion Papers 2011-36, UCLouvain, Available at SSRN: https://ssrn.com/abstract=2293903 or http://dx.doi.org/10.2139/ssrn.2293903

Marco Pecoraro (Contact Author)

University of Neuchatel ( email )

Rue Abram-Louis-Breguet 2
Neuchatel, CH-2000
Switzerland

HOME PAGE: http://www2.unine.ch/sfm/page-14462.html

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