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Educational mismatch and labor earnings in Brazil

Author

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  • Mauricio Cortez Reis

Abstract

Purpose - The purpose of this paper is to investigate the relationship between educational mismatch and labor earnings in Brazil, taking into account individual fixed effects. Design/methodology/approach - The empirical analysis employs longitudinal data and information provided by job analysts about the schooling required for each occupation. The latter of which is used to classify workers as undereducated, overeducated, or adequately matched. Estimates include individual fixed effects to control for time-invariant unobserved heterogeneity. Findings - Evidence indicates that one more year of overeducation increases labor earnings, but only half as strong as one more year of required schooling. The estimated effects on years of undereducation are negative, but undereducated workers earn more than adequately matched workers with the same level of education. Although, in particular, the incidence of undereducation in Brazil is much higher than reported for developed countries, the impact of over- and undereducation does not differ. Research limitations/implications - The fixed effects approach only controls for unobservable factors that are time-invariant. Also, much lower impacts using fixed effects may be due in part to attenuation bias as a consequence of measurement errors. Originality/value - This study contributes to the scarce literature on the consequences of overeducation and undereducation for labor earnings in developing countries, providing estimates that take into account individual fixed effects.

Suggested Citation

  • Mauricio Cortez Reis, 2017. "Educational mismatch and labor earnings in Brazil," International Journal of Manpower, Emerald Group Publishing Limited, vol. 38(2), pages 180-197, May.
  • Handle: RePEc:eme:ijmpps:ijm-02-2016-0030
    DOI: 10.1108/IJM-02-2016-0030
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    Citations

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    Cited by:

    1. SAM, Vichet, 2018. "Overeducation among graduates in developing countries: What impact on economic growth?," MPRA Paper 87674, University Library of Munich, Germany.
    2. Maqbool H. Sial & Ghulam Sarwar & Mubashra Saeed, 2019. "Surplus Education and Earnings Differentials in Pakistan: A Quantile Regression Analysis," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 24(2), pages 93-114, July-Dec.
    3. Sam, Vichet, 2018. "Impact of education-job mismatches on wage: The case of university graduates in Cambodia," MPRA Paper 110011, University Library of Munich, Germany.

    More about this item

    Keywords

    Brazil; Overeducation; Undereducation; Labor earnings; J24; J31; I21;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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