Overeducation, market recognition, and effective labour supply
Xiujian Peng and
China Economic Review, 2020, vol. 59, issue C
Supply of skilled workers in an economy is usually measured based on the number of highly educated people. This may, however, lead to an overestimation of effective labour supply when considerable people are overeducated. By incorporating a concept of “market recognition,” which proxies the gap between the capabilities reflected through the education level and the capabilities required by employers, we establish a general equilibrium model to quantify this gap in China during 1999–2011. Our calibration results show that overeducation had deteriorated as market recognition continued to decline. We give an interpretation from the perspective of effective labour supply.
Keywords: Overeducation; Market recognition; Human capital; Labour supply; Computable general equilibrium model (CGE) (search for similar items in EconPapers)
JEL-codes: J21 J24 I21 I26 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:59:y:2020:i:c:s1043951x19301452
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