The Magnitude and Predictors of Overeducation and Overskilling in Latin America: Evidence from PIAAC

60 Pages Posted: 19 May 2022

See all articles by Juan Castro

Juan Castro

Universidad del Pacifico

Lorena Ortega

University of Chile

Gustavo Yamada

Universidad del Pacifico

David Mata

Universidad del Pacifico

Abstract

Occupational mismatch, defined as a discrepancy between workers' qualifications or skills and those required by their job, is a highly debated phenomenon in developed countries, but rarely addressed in developing economies from a comparative perspective. This study investigates the magnitudes of overeducation and overskilling, and their correlates, in four developing Latin American countries that have undergone a rapid and unregulated expansion of tertiary education participation (i.e. Chile, Ecuador, Mexico and Peru). Using a variety of measures derived from PIAAC data, we find that the magnitudes of subjective overeducation, and objective and subjective overskilling are sizable (particularly in Chile and Mexico), albeit lower than OECD estimates. Differences in objective overskilling between the OECD and LAC countries are largely explained by workforce skill levels. We also find that overeducation, overskilling and credential inflation affect those occupations which arguably require less qualifications. Potential supply and demand side explanations for these patterns are discussed.

Keywords: Latin America, PIAAC, occupational mismatch, overeducation, overqualification, overschooling, overskilling

JEL Classification: O54, I26, J24

Suggested Citation

Castro, Juan and Ortega, Lorena and Yamada, Gustavo and Mata, David, The Magnitude and Predictors of Overeducation and Overskilling in Latin America: Evidence from PIAAC. IZA Discussion Paper No. 15143, Available at SSRN: https://ssrn.com/abstract=4114702 or http://dx.doi.org/10.2139/ssrn.4114702

Juan Castro (Contact Author)

Universidad del Pacifico ( email )

Av. Salaverry 2020
Región Metropolitana
Lima 18, Lima 11
Peru

Lorena Ortega

University of Chile

Pío Nono Nº1, Providencia
Santiago, R. Metropolitana 7520421
Chile

Gustavo Yamada

Universidad del Pacifico

Av. Salaverry 2020
Región Metropolitana
Lima 18, Lima 11
Peru

David Mata

Universidad del Pacifico

Av. Salaverry 2020
Región Metropolitana
Lima 18, Lima 11
Peru

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