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The effect of overskilling dynamics on wages

Author

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  • Kostas Mavromaras
  • St�phane Mahuteau
  • Peter Sloane
  • Zhang Wei

Abstract

We use a random-effects dynamic probit model to estimate the effect of overskilling dynamics on wages. We find that overskilling mismatch is common and more likely among those who have been overskilled in the past. It is also highly persistent, in a manner that is inversely related to educational level. Yet, the wages of university graduates are reduced more by past overskilling than for any other education level. A possible reason for this wage effect is that graduates tend to be in better-paid jobs and therefore there is more at stake for them if they get it wrong.

Suggested Citation

  • Kostas Mavromaras & St�phane Mahuteau & Peter Sloane & Zhang Wei, 2013. "The effect of overskilling dynamics on wages," Education Economics, Taylor & Francis Journals, vol. 21(3), pages 281-303, July.
    • Handle: RePEc:taf:edecon:v:21:y:2013:i:3:p:281-303
    DOI: 10.1080/09645292.2013.797382
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    2. Andrea Diem & Stefan C. Wolter, 2014. "Overeducation among Swiss university graduates: determinants and consequences [Nicht ausbildungsadäquate Beschäftigung bei Universitätsabsolventinnen und -absolventen – Determinanten und Konsequenz," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 47(4), pages 313-328, December.
    3. 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.
    4. Mariya Neycheva, 2021. "Qualification (Mis)Match for Upper Secondary and Higher Education," Social Sciences, MDPI, vol. 10(9), pages 1-15, August.
    5. Mariya Neycheva & Ivan Neychev, 2020. "Overeducation and Economic Growth: Theoretical Background and Empirical Findings for the Region of Central and Eastern Europe," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 5, pages 124-142.
    6. Piróg Danuta & Hibszer Adam, 2023. "Which Skills are the Most Prized? Analysing Monetary Value of Geographers’ Skills on the Labour Market in Six European Countries," Quaestiones Geographicae, Sciendo, vol. 42(4), pages 63-79, December.
    7. Müge Adalet McGowan & Dan Andrews, 2015. "Skill Mismatch and Public Policy in OECD Countries," OECD Economics Department Working Papers 1210, OECD Publishing.
    8. Lindsey Macmillan & Richard Murphy & Gill Wyness, 2024. "Occupational hazard: Inequalities in labour market mismatch," CEPEO Working Paper Series 24-06, UCL Centre for Education Policy and Equalising Opportunities, revised Oct 2024.
    9. Marta Martínez-Matute & Ernesto Villanueva, 2023. "Task specialization and cognitive skills: evidence from PIAAC and IALS," Review of Economics of the Household, Springer, vol. 21(1), pages 59-93, March.
    10. Peter J. Sloane & Kostas Mavromaras, 2020. "Overeducation, skill mismatches, and labor market outcomes for college graduates," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-88, May.
    11. Yih‐chyi Chuang & Chia‐Yu Liang, 2022. "Overeducation and skill mismatch of university graduates in Taiwan," Review of Development Economics, Wiley Blackwell, vol. 26(3), pages 1693-1712, August.
    12. Kristina Nyström, 2021. "Recruitment of scarce competences to rural regions: Policy perspectives," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 41(2), pages 211-227, October.
    13. Petya Ilieva-Trichkova & Pepka Boyadjieva, 2021. "The Fragile Axes of Life: A Capability Approach Perspective towards Graduates’ Education–Job Mismatches and Subjective Well-Being," Social Sciences, MDPI, vol. 10(7), pages 1-18, July.
    14. McGuinness, Seamus & Pouliakas, Konstantinos, 2016. "Deconstructing Theories of Overeducation in Europe: A Wage Decomposition Approach," IZA Discussion Papers 9698, Institute of Labor Economics (IZA).

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    More about this item

    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

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