Overeducation and R&D: Theoretical Aspects and Empirical Evidence

Marco Di Cintio

Journal of Human Capital, 2022, vol. 16, issue 2, 183 - 232

Abstract: This work introduces R&D firms to a matching model to investigate their effect on overeducation. Moreover, we have enriched the empirical literature on the relationship between overeducation and R&D by evaluating whether the introduction of a tax credit to the R&D expenditures of Italian firms affected the PhDs’ probability of being overeducated. Our results first highlight that overeducation may be consistent with a share of graduate individuals who may be either lower (tightness dominance scenario) or higher (composition dominance scenario) than that optimally required by a social planner. Second, our model shows that the R&D incentives may decrease the likelihood of mismatches.

Date: 2022
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