Overeducation wage penalty for university graduates: evidence from the MENA region using machine learning techniques

Obbey A. Elamin

Middle East Development Journal, 2023, vol. 15, issue 1, 151-188

Abstract: This study estimates the causal effect of overeducation on wages using cross-sectional survey data from three countries in the Middle East and North Africa region. The Labour Market Panel Survey data from Jordan in 2016, Tunisia in 2014, and Egypt in 2012 and 2018 are used. Overeducation occurs when an individual works in a job that requires someone with less education. Our analysis focuses on employees with high school or college education in paid-wage jobs. Overeducation in the data is self-reported. Between 10% and 50% of the samples in the various countries are overeducated, with overeducation being more pronounced among high school than college-educated people. The novel causal forest method as well as the nearest neighbour and propensity score matching methods are used to estimate the over-education wage penalty. The overeducation job mismatch wage penalty is significant in both total wage and basic wage. The size of the penalty, however, varies considerably between the three countries and is negatively associated with the prevalence of overeducation in the job market in each country. The penalty in total wage ranges from 17% in Egypt in 2012 to approximately 50% in Tunisia. High school graduates have smaller penalties. We recommend policies such as conducting more active labour market programmes to reduce the stock of mismatched workforce, enhancing job search services to improve the quality of matching in new vacancies, and following strategies that motivate entrepreneurship.

Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/17938120.2023.2167482 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:rmdjxx:v:15:y:2023:i:1:p:151-188

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rmdj20

DOI: 10.1080/17938120.2023.2167482

Access Statistics for this article

Middle East Development Journal is currently edited by Raimundo Soto

More articles in Middle East Development Journal from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().