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The signalling role of over-education and qualifications mismatch

Inmaculada García-Mainar () and Victor Montuenga ()

Journal of Policy Modeling, 2019, vol. 41, issue 1, 99-119

Abstract: Over-education may arise from the voluntary decisions of individuals to acquire more qualifications than those required in the workplace, such that over-education may have a signaling role that allows workers to compensate for the lack of certain other skills, or to gain access to the labor market. This paper analyses the signaling role of over-education in Spain, a country characterised by a strongly-segmented labor market with high unemployment levels, and a large number of over-educated. Using micro data for a representative sample of Spanish workers, three different methods are applied to provide evidence that educational mismatch plays a clear signaling role. Policy implications are derived to alleviate inefficiencies in the allocation of educational resources and in the incentives of workers to use over-education as a signal.

Keywords: Human capital; Over-education; Rate of return; Signaling (search for similar items in EconPapers)
JEL-codes: I26 J24 J28 (search for similar items in EconPapers)
Date: 2019
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Handle: RePEc:eee:jpolmo:v:41:y:2019:i:1:p:99-119