Education as investment, consumption or adapting to social norm: Implications for educational mismatch among graduates

We investigate the role of four motives to participate in higher education – investment, educational consumption, student life consumption and social pressure – on field of study choices and academic performance and on three labour market outcomes – over-education, wages and job satisfaction. We use data on three cohorts of about 3000 Flemish individuals documenting the transition from education to work. Principal components are used to identify the four study motives. Effects of study motives on field of study choices and academic performance are estimated using logit respectively Poisson regression. Effects on over-education are measured by two-bit regression and on wages and job satisfaction using standard and IV panel estimates. Key findings are that individuals motivated by education consumption are less likely to be overeducated but face a stronger job satisfaction penalty to over-education than other workers. Our results also suggest that individuals who continue in education because of student life consumption have a higher likelihood of over-education.