Overeducation and Skill Endowments: The Role of School Achievement and Vocational Training Quality

37 Pages Posted: 20 Aug 2001

See all articles by Felix Büchel

Felix Büchel

Max Planck Institute for Human Development; Institute for the Study of Labor (IZA)

Matthias Pollmann-Schult

Max Planck Institute for Human Development

Date Written: August 2001

Abstract

Thurow's job-competition model implies that overeducation is contingent upon the differing skill endowments of employees. As yet, only rudimentary evidence has been furnished to confirm this relationship. In the present paper, we test the theory in a more sophisticated manner, by means of a more differentiated survey of the skill endowments of workers. Our analyses are based on the German Life History Study (GLHS), in which longitudinal biographical data was gathered for the West German cohorts born in 1964 and 1971 up until the year of the survey (1998). These data are analyzed using a trivariate probit model which takes into account the selective acquisition of school qualifications, and the selective choice of vocational training with varying levels of quality.

Our findings confirm that type and grade of school leaving certificate both have a strong effect on the later risk of overeducation. The quality of the vocational training chosen only impacts on the overeducation risk when the strong selectivity effects in certain types of schools and types of vocational training are not taken into account. In line with existing literature, we find that the risk of overeducation decreases with increasing traditional skill measures such as experience, tenure, on-the-job-training, and further education. In sum, our results clearly confirm the capacity of the job-competition model to explain the persistence of overeducation in the labor market.

Keywords: Overeducation, Skills, Human Capital, School Achievement, Vocational Training, Career Mobility, Intergenerational Mobility, Selectivity Effects

JEL Classification: I21, J24, J41, J62

Suggested Citation

Büchel, Felix and Pollmann-Schult, Matthias, Overeducation and Skill Endowments: The Role of School Achievement and Vocational Training Quality (August 2001). Available at SSRN: https://ssrn.com/abstract=278529

Felix Büchel (Contact Author)

Max Planck Institute for Human Development ( email )

Lentzeallee 94
D-14195 Berlin, 14195
Germany
+49 30 8240 6427 (Phone)
+49 30 8249 939 (Fax)

Institute for the Study of Labor (IZA)

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

Matthias Pollmann-Schult

Max Planck Institute for Human Development

Lentzeallee 94
D-14195 Berlin, 14195
Germany

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