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The career prospects of overeducated Americans

Author

Listed:
  • Brian Clark

    (Federal Trade Commission)

  • Clément Joubert

    (World Bank)

  • Arnaud Maurel

    (Duke University
    IZA
    NBER)

Abstract

In this paper we analyze career dynamics for US workers who have more schooling than their peers in the same occupation. We use data from the NLSY79 combined with the CPS to analyze transitions into and out of overeducated employment, together with the corresponding effects on wages. Overeducation is a fairly persistent phenomenon at the aggregate and individual levels, with 66% of workers remaining overeducated after 1 year. Overeducation is not just more common but also more persistent among blacks and low-AFQT individuals. Further, the hazard rate out of overeducation drops by about 60% during the first 5 years spent overeducated. However, the estimation of a mixed proportional hazard model suggests that this is attributable to selection on unobservables rather than true duration dependence. Lastly, overeducation is associated with lower current as well as future wages, consistent with scarring effects.

Suggested Citation

  • Brian Clark & Clément Joubert & Arnaud Maurel, 2017. "The career prospects of overeducated Americans," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-29, December.
    • Handle: RePEc:spr:izalbr:v:6:y:2017:i:1:d:10.1186_s40172-017-0053-4
    DOI: 10.1186/s40172-017-0053-4
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    More about this item

    Keywords

    Human capital; Earnings dynamics; Overeducation;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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