Is There Still a Wage Penalty for Being Overeducated But Well‐Matched in Skills? A Panel Data Analysis of a Swiss Graduate Cohort

29 Pages Posted: 8 Aug 2014

Multiple version iconThere are 2 versions of this paper

Date Written: September 2014

Abstract

Using two periods' panel data from the Swiss Graduate Survey, this study examines the incidence, persistence and wage effects of overeducation. An alternative measure of overeducation that accounts for graduate heterogeneity in perceived skills mismatch is used. This analysis differs from previous panel data studies in that two estimation methods are applied to control for unobserved ability. Results indicate that graduates who are overeducated and mismatched in skills are the most penalized in terms of earnings. This evidence is still valid when unobserved ability is accounted for, whereas the pay penalty is no more significant for graduates who are overeducated but matched in skills. This result is robust to different definitions of perceived skills mismatch and is consistent with the notion that apparent overeducation reflects a lack of unobserved attributes, such as ability.

JEL Classification: I21, J24, J31

Suggested Citation

Pecoraro, Marco, Is There Still a Wage Penalty for Being Overeducated But Well‐Matched in Skills? A Panel Data Analysis of a Swiss Graduate Cohort (September 2014). LABOUR, Vol. 28, Issue 3, pp. 309-337, 2014, Available at SSRN: https://ssrn.com/abstract=2477603 or http://dx.doi.org/10.1111/labr.12031

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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