Jump to ContentJump to Main Navigation
Show Summary Details
In This Section

The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Auriol , Emmanuelle / Brunner, Johann / Fleck, Robert / Mendola, Mariapia / Requate, Till / Schirle, Tammy / de Vries, Frans / Zulehner, Christine

4 Issues per year


IMPACT FACTOR 2016: 0.252
5-year IMPACT FACTOR: 0.755

CiteScore 2016: 0.48

SCImago Journal Rank (SJR) 2015: 0.501
Source Normalized Impact per Paper (SNIP) 2015: 0.418

Online
ISSN
1935-1682
See all formats and pricing
In This Section
Volume 17, Issue 1 (Feb 2017)

Issues

Volume 6 (2006)

Volume 4 (2004)

Volume 2 (2002)

Volume 1 (2001)

The Impact of Educational Mismatches on Wages: The Influence of Measurement Error and Unobserved Heterogeneity

Sana Sellami
  • Faculty of Applied Economics, Department of Economics, Antwerp University, 2000Antwerpen, Belgium
  • Email:
/ Dieter Verhaest
  • Corresponding author
  • Faculty of Economics and Business, ECON research group and Leuven Economics of Education Research (LEER), KU Leuven, campus Brussels, Brussels, Belgium
  • Email:
/ Walter Nonneman
  • Faculty of Applied Economics, Department of Economics, Antwerp University, 2000Antwerpen, Belgium
  • Email:
/ Walter Van Trier
  • SHERPPA, Ghent University, 9000Gent, Belgium
  • Email:
Published Online: 2017-02-14 | DOI: https://doi.org/10.1515/bejeap-2016-0055

Abstract

We investigate the differential impact of alternative combinations of horizontal and vertical educational mismatches on wages. By using panel data for Belgian graduates, we consider the role of unobserved worker heterogeneity. Random measurement error in both types of mismatches is accounted for by adopting instrumental variable techniques. We consistently find that overeducated individuals without field of study mismatch earn less than adequately educated workers with a similar educational background. However, for individuals who are working outside their field of study, such a wage penalty is not always observed once accounting for unobserved heterogeneity and random measurement error. In some cases, field of study mismatch even seems to be financially beneficial to the worker. These findings contribute to our understanding regarding the extent to which educational mismatches are truly problematic. The results call for policies that focus primarily on combatting vertical mismatches.

Keywords: returns to education; field of study mismatch; overeducation; underemployment; earnings inequality; ability bias

JEL Classification: I24; J24; J31

References

  • Battu, H., C. Belfield, and P. Sloane. 2000. “How Well Can We Measure Graduate Overeducation and Its Effect?” National Institute Economic Review 171: 82–93.

  • Bauer, T. 2002. “Educational Mismatch and Wages: A Panel Analysis.” Economics of Education Review 21: 221–229. [Crossref]

  • Becker, G. 1964. Human Capital. New York: Columbia University Press.

  • Béduwé, C., and J.F. Giret. 2011. “Mismatch of Vocational Graduates: What Penalty on French Labour Market?” Journal of Vocational Behavior 78: 68–79. [Crossref]

  • Bender, K.A., and J.S. Heywood. 2009. “Educational Mismatch among Ph.D.S: Determinants and Consequences.” In Science and Engineering Careers in the United States: An Analysis of Markets and Employment., edited by R.B. Freemann, and D.L. Goroff, 229–255. Chicago: NBER.

  • Borghans, L., and A. de Grip. 2000. “The Debate in Economics about Skill Utilization.” In The Overeducated Worker?., edited by L. Borghans, and A. de Grip, 3–23. Cheltenham: Edward Elgar.

  • Carroll, D., and M. Tani. 2013. “Over-Education of Recent Higher Education Graduates: New Australian Panel Evidence.” Economics of Education Review 32: 207–218. [Crossref]

  • (CBS) (2001).Standaard beroepenclassificatie 1992 - editie 2001 Voorburg/Heerlen: Centraal Bureau voor de Statistiek 1–69.

  • Chevalier, A. 2003. “Measuring Over-Education.” Economica 70: 509–531. [Crossref]

  • Chevalier, A., and J. Lindley. 2009. “Overeducation and the Skills of UK Graduates.” Journal of the Royal Statistical Society A 172: 307–337. [Crossref]

  • Dolado, J., M. Jansen, and J. Jimeno. 2009. “On-The-Job Search in a Matching Model with Heterogeneous Jobs and Workers.” Economic Journal 119: 200–228. [Crossref]

  • Dolton, P., and M. Silles. 2008. “The Effects of Over-Education on Earnings in the Graduate Labour Market.” Economics of Education Review 27: 125–139. [Crossref]

  • (European Commission) (2013).The Skill Mismatch Challenge in Europe. 74 Commission Staff Working Document.

  • Frank, R. 1978. “Why Women Earn Less: The Theory and Estimation of Differential Overqualification.” American Economic Review 68: 360–373.

  • Frenette, M. 2004. “The Overqualified Canadian Graduate: The Role of the Academic Program in the Incidence, Persistence, and Economic Returns to Overqualification.” Economics of Education Review 23: 29–45. [Crossref]

  • Green, F., S. McIntosh, and A. Vignoles. 2002. “The Utilization of Education and Skills: Evidence from Britain.” The Manchester School 70: 792–811. [Crossref]

  • Groot, W., and H.M. van den Brink. 2000. “Overeducation in the Labor Market: A Meta-Analysis.” Economics of Education Review 19: 149–158. [Crossref]

  • Hartog, J. 2000. “Overeducation and Earnings: Where are We, Where Should We Go?” Economics of Education Review 19: 131–147. [Crossref]

  • ILO. 2014. Skills Mismatch in Europe., 32. Geneva: ILO.

  • Jovanovic, B. 1979. “Job Matching and the Theory of Turnover.” Journal of Political Economy 87: 972–990. [Crossref]

  • Korpi, T., and M. Tåhlin. 2009. “Education Mismatch, Wages, and Wage Growth: Overeducation in Sweden 1974-2000.” Labour Economics 16: 183–193. [Crossref]

  • Leuven, E., and H. Oosterbeek. 2011. “Overeducation and Mismatch in the Labor Market.” In Handbook of the Economics of Education: Volume 4., edited by E. Hanushek, S. Machin, and L. Woessman, 283–326. Amsterdam: Elsevier.

  • Levels, M., R. van der Velden, and J. Allen. 2014. “Educational Mismatches and Skills: New Empirical Tests of Old Hypotheses.” Oxford Economic Papers 66: 959–982. [Crossref]

  • Mavromaras, K., S. McGuinness, N. O’Leary, P. Sloane, and Z. Wei. 2013. “Job Mismatches and Labour Market Outcomes: Panel Evidence on Australian University Graduates.” Economic Record 89: 382–395. [Crossref]

  • McGuinness, S. 2006. “Overeducation in the Labor Market.” Journal of Economic Surveys 20: 387–418. [Crossref]

  • McGuinness, S., and P. Sloane. 2011. “Labour Market Mismatch among UK Graduates: An Analysis Using REFLEX Data.” Economics of Education Review 30: 130–145. [Crossref]

  • OECD. 2013. OECD Skills Outlook 2013: First Results from the Survey of Adult Skills., 466. Paris: OECD.

  • Pecoraro, M. 2014. “Is There Still A Wage Penalty for Being Overeducated but Well-Matched in Skills? A Panel Data Analysis of a Swiss Graduate Cohort.” Labour 28: 309–337. [Crossref]

  • Robst, J. 1994. “Measurement Error and the Returns to Excess Schooling.” Applied Economics Letters 1: 142–144. [Crossref]

  • Robst, J. 2007a. “Education and Job Match: The Relatedness of College Major and Work.” Economics of Education Review 26: 397–407. [Crossref]

  • Robst, J. 2007b. “Education, College Major, and Job Match: Gender Differences in Reasons for Mismatch.” Education Economics 15: 159–175. [Crossref]

  • Robst, J. 2008. “Overeducation and College Major: Expanding the Definition of Mismatch between Schooling and Jobs.” The Manchester School 76: 349–368. [Crossref]

  • Rubb, S. 2003. “Overeducation in the Labor Market: A Comment and Re-Analysis of A Meta-Analysis.” Economics of Education Review 22: 621–629. [Crossref]

  • Sellami, S., D. Verhaest, and W. Van Trier. (2016).How to measure field-of-study mismatch? A comparative analysis of the different methods Antwerp: University of Antwerp 38 Faculty of Applied Economics Research Papers, D/2016/1169/009.

  • Sohn, K. 2010. “The Role of Cognitive and Noncognitive Skills in Overeducation.” Journal of Labor Research 31: 124–145. [Crossref]

  • (SONAR) (2003).Hoe maken Vlaamse jongeren de overgang van school naar werk? Basisrapportering cohorte 1978 (eerste golf) 1–147.

  • (SONAR) (2004).Hoe maken Vlaamse jongeren de overgang van school naar werk? Basisrapportering cohorte 1976 (tweede golf) 1–116.

  • (SONAR) (2005).Hoe maken Vlaamse jongeren de overgang van school naar werk? Technisch rapport cohorte 1980 (eerste golf) 1–181.

  • Stock, J., J. Wright, and M. Yogo. 2002. “A Survey of Weak Instruments and Weak Identification in Generalized Method of Moments.” Journal of the American Statistical Association 20: 518–529.

  • Stock, J., and M. Yogo. 2005. “Testing for Weak Instruments in Linear IV Regression.” In Identification and Inference for Econometric Models: Essays in Honor of Thomas Rothenberg., edited by D.W. Andrews, and J.H. Stock, 80–108. Cambridge: Cambridge University Press.

  • Støren, L.A., and C.A. Arnesen. 2011. “Winners and Losers.” In The Flexible Professional in the Knowledge Society., edited by J. Allen, and R. van der Velden, 199–240. Dordrecht: Springer.

  • Thurow, L. 1975. Generating Inequality. New York: Basic Books.

  • Van der Meer, P. 2006. “The Validity of Two Education Requirement Measures.” Economics of Education Review 25: 211–219. [Crossref]

  • Van der Velden, R., and M. van Smoorenburg. 1999. “Overscholing en beloning: Het effect van verschillende meetmethoden.” Tijdschrift voor Arbeidsvraagstukken 15: 111–123.

  • Verhaest, D., and E. Omey. 2006. “Measuring the Incidence of Over- and Undereducation.” Quality and Quantity 40: 783–803.

  • Verhaest, D., and E. Omey. 2010. “The Determinants of Overeducation: Different Measures, Different Outcomes?” International Journal of Manpower 31: 608–625. [Crossref]

  • Verhaest, D., and E. Omey. 2012. “Overeducation, Undereducation and Earnings: Further Evidence on the Importance of Ability and Measurement Error Bias.” Journal of Labor Research 33: 76–90. [Crossref]

  • Verhaest, D., S. Sellami, and R. van der Velden. 2017. “Differences in Horizontal and Vertical Mismatches across Countries and Fields of Study.” International Labour Review.. forthcoming. DOI: [Crossref].

  • Verhaest, D., W. Van Trier, and S. Sellami. 2011. “Welke factoren bepalen de aansluiting van onderwijs en beroep? Een onderzoek bij Vlaamse afgestudeerden uit het hoger onderwijs.” Tijdschrift voor Arbeidsvraagstukken 27: 416–436.

  • Wolbers, M. 2003. “Job Mismatches and Their Labour Market Effects among School-Leavers in Europe.” European Sociological Review 19: 249–266. [Crossref]

  • Wooldridge, J. 2009. Introductory Econometrics: A Modern Approach. Mason: South-Western Cengage Learning.

About the article

Published Online: 2017-02-14


Flemish Government, (Grant/Award Number: ‘SSL Policy Research Centre grant’).



Citation Information: The B.E. Journal of Economic Analysis & Policy, ISSN (Online) 1935-1682, ISSN (Print) 2194-6108, DOI: https://doi.org/10.1515/bejeap-2016-0055. Export Citation

Comments (0)

Please log in or register to comment.
Log in