Objective over-education and worker well-being: A shadow price approach

Dieter Verhaest and Eddy Omey

Journal of Economic Psychology, 2009, vol. 30, issue 3, pages 469-481

Abstract: This paper examines, for a sample of Flemish school leavers, the relation between objective over-education and job satisfaction by applying a shadow price approach. We differentiate between direct effects of over-education and indirect effects via other job characteristics that are associated with over-education. Additional fixed-effects estimates are executed to account for individual heterogeneity. The utility consequences of over-education are found to be large and cannot be compensated by a reasonable wage increase at the start of the first employment. These outcomes suggest that, at labour-market entry, over-education is largely involuntary, and is likely to induce negative productivity costs. The negative consequences of over-education are also found to diminish with years of work experience.

Keywords: Over-education; Mismatch; Under-employment; Job; satisfaction; Well-being; Shadow; price (search for similar items in EconPapers)
Date: 2009

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Persistent link: http://EconPapers.repec.org/RePEc:eee:joepsy:v:30:y:2009:i:3:p:469-481

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