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Educational Mismatch and Wages in Germany

Author

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  • Bauer, Thomas K.

    (RWI)

Abstract

This paper contributes to the literature considering the wage effects of educational mismatch in Germany. It uses a large German panel data set for the period from 1984 to 1997 and stresses the importance of controlling for unobserved heterogeneity when analyzing the labor market effects of over- and undereducation. Using pooled OLS, the estimation results confirm those found in the existing literature. The estimated differences between adequately and inadequately educated workers become smaller or disappear totally, when controlling for unobserved heterogeneity. In contrast to the common results using only cross-sectional data, the human capital model could not be rejected once controlling for unobserved heterogeneity.

Suggested Citation

  • Bauer, Thomas K., 1999. "Educational Mismatch and Wages in Germany," IZA Discussion Papers 87, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp87
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    File URL: https://docs.iza.org/dp87.pdf
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    Citations

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    Cited by:

    1. Sandra Nieto & Raúl Ramos, 2013. "Non-Formal Education, Overeducation And Wages," Revista de Economia Aplicada, Universidad de Zaragoza, Departamento de Estructura Economica y Economia Publica, vol. 21(1), pages 5-28, Spring.
    2. Spitz, Alexandra, 2004. "Are Skill Requirements in the Workplace Rising? Stylized Facts and Evidence on Skill-Biased Technological Change," ZEW Discussion Papers 04-33, ZEW - Leibniz Centre for European Economic Research.
    3. Fertig, Michael & Schmidt, Christoph M., 2000. "Discretionary Measures of Active Labor Market Policy: The German Employment Promotion Reform in Perspective," IZA Discussion Papers 182, Institute of Labor Economics (IZA).
    4. Nielsen, Chantal Pohl, 2007. "Immigrant overeducation : evidence from Denmark," Policy Research Working Paper Series 4234, The World Bank.

    More about this item

    Keywords

    job competition model; Overeducation; undereducation; human capital model;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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