Overeducation in the Labour Market

This paper presents a review of the literature on overeducation. The paper assesses the consistency of overeducation within the context of a number of theoretical frameworks including Human Capital Theory "HCT" and Assignment Theory. The analysis goes on to discuss the various measurement controversies associated with the study of overeducation in order to provide an assessment of the extent to which the impacts of the phenomenon represent an economic reality as opposed to a statistical artefact. After reviewing the literature, it is concluded that the impacts of overeducation are likely to be non-trivial and that the phenomenon may potentially be costly to individuals and firms, as well as the economy more generally. The existence of overeducation also raises some doubts with respect to the validity of some of the central assumptions and predictions of HCT that are unlikely to be fully explained by gaps in the standard wage equation framework. Copyright Blackwell Publishers Ltd, 2006.

[1]  A. Vignoles,et al.  The incidence and effects of overeducation in the U.K. graduate labour market , 2000 .

[2]  John Robst.  College quality and overeducation , 1995 .

[3]  Geoff Mason.  Graduate Utilisation In British Industry: The Initial Impact Of Mass Higher Education , 1996 .

[4]  N. Sicherman.  "Overeducation" in the Labor Market , 1991, Journal of Labor Economics.

[5]  M. Spence.  Job Market Signaling , 1973 .

[6]  M. Frenette.  The overqualified Canadian graduate: the role of the academic program in the incidence, persistence, and economic returns to overqualification , 2004 .

[7]  Petra E. Todd,et al.  Fifty Years of Mincer Earnings Regressions , 2003, SSRN Electronic Journal.

[8]  J. Mincer.  Schooling, Experience, and Earnings , 1976 .

[9]  Russell W. Rumberger,et al.  The impact of surplus schooling on worker productivity , 1986 .

[10]  Shaun P. Vahey.  The great Canadian training robbery: evidence on the returns to educational mismatch , 2000 .

[11]  Russell W. Rumberger,et al.  The Impact of Surplus Schooling on Productivity and Earnings , 1987 .

[12]  M. van Ham,et al.  Overeducation, Regional Labor Markets and Spatial Flexibility , 2002, SSRN Electronic Journal.

[13]  C. Alpin,et al.  Over- and undereducation in the UK graduate labour market , 1998 .

[14]  G. Duncan,et al.  Premiums and penalties for surplus and deficit education: Evidence from the United States and Germany , 2000 .

[15]  Greg J. Duncan,et al.  The incidence and wage effects of overeducation , 1981 .

[16]  How Well Can We Measure Graduate Over- Education and Its Effects? , 2000, National Institute Economic Review.

[17]  H. Battu,et al.  The Theory of Differential Overqualification: Does it Work? , 2002, SSRN Electronic Journal.

[18]  S. McGuinness,et al.  Overeducation in the graduate labour market: A quantile regression approach , 2007 .

[19]  W. Groot,et al.  Skill mismatches in the Dutch labor market , 2000 .

[20]  Anna Vignoles,et al.  Overeducation and Skills - Clarifying the Concepts , 1999 .

[21]  Alfonso Alba-Ramirez,et al.  Mismatch in the Spanish Labor Market: Overeducation? , 1993 .

[22]  KimMarie McGoldrick,et al.  Gender Differences in Overeducation: A Test of the Theory of Differential Overqualification , 1996 .

[23]  B. F. Kiker,et al.  Overeducation and undereducation: Evidence for Portugal , 1997 .

[24]  Stephen D. Rubb,et al.  Overeducation in the labor market: a comment and re-analysis of a meta-analysis , 2003 .

[25]  Wim Groot,et al.  The incidence of, and returns to overeducation in the UK , 1996 .

[26]  E. Cohn.  The Impact of Surplus Schooling on Earnings: Comment , 1992 .

[27]  Peter J. Sloane,et al.  Overeducation and the formal education/experience and training trade-off , 1996 .

[28]  Robert H. Frank,et al.  Why Women Earn Less: The Theory and Estimation of Differential Overqualification , 1978 .

[29]  T. Bauer.  Educational mismatch and wages: a panel analysis , 2002 .

[30]  Arnaud Chevalier,et al.  Measuring Over‐education , 2003 .

[31]  E. Cohn,et al.  The wage effects of overschooling revisited , 1995 .

[32]  Peter J. Sloane,et al.  To what extent are ethnic minorities in Britain over‐educated? , 2002 .

[33]  The role of human capital and technological change in overeducation , 2000 .

[34]  J. Hartog,et al.  Overeducation, Wages and Promotions within the Firm , 2003, SSRN Electronic Journal.

[35]  M. Tsang,et al.  The impact of underutilization of education on productivity: A case study of the U.S. Bell companies , 1987 .

[36]  V. Burris.  The Social and Political Consequences of Overeducation. , 1983 .

[37]  Ian Walker,et al.  The College Wage Premium, Overeducation, and the Expansion of Higher Education in the UK , 2005, SSRN Electronic Journal.

[38]  H. Patrinos.  OVEREDUCATION IN GREECE , 1997 .

[39]  OPTIMAL ‘MISMATCH’ AND PROMOTIONS , 1995 .

[40]  R. Verdugo,et al.  The Impact of Surplus Schooling on Earnings: Some Additional Findings. , 1989 .

[41]  Y. Ng,et al.  Incidence and wage effects of overschooling and underschooling in Hong Kong , 2000 .

[42]  Richard B. Freeman,et al.  The overeducated American , 1976 .

[43]  S. McGuinness.  Graduate overeducation as a sheepskin effect: evidence from Northern Ireland , 2003 .

[44]  Rolf van der Velden,et al.  Educational mismatches versus skill mismatches: effects on wages, job satisfaction, and on-the-job search , 2001 .

[45]  D. McMillen,et al.  A Hedonic Analysis Of Overeducation And Undereducation , 2000 .

[46]  S. McGuinness.  University quality and labour market outcomes , 2003 .

[47]  Anna Vignoles,et al.  The Utilization of Education and Skills: Evidence from Britain , 2002 .

[48]  Overeducation and the returns to enterprise-related schooling , 1993 .

[49]  Wim Groot,et al.  Are we educating too much? Overeducation in the labor market: A meta analysis , 2000 .

[50]  G. Becker,et al.  Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition , 1993 .

[51]  Gary S Becker,et al.  Front matter, Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education , 1965 .

[52]  Hessel Oosterbeek,et al.  Education, allocation and earnings in the Netherlands: 0verschooling? , 1988 .

[53]  R. Dekker,et al.  The effects of training and overeducation on career mobility in a segmented labour market , 1996 .

[54]  W. Groot,et al.  Allocation and the Returns to Over-education in the UK , 1997 .

[55]  Michael Sattinger,et al.  Assignment Models of the Distribution of Earnings , 1993 .

[56]  Peter J. Sloane,et al.  Overeducation, undereducation and the British labour market , 1999 .