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Overeducation and earnings: some further paneldata evidence

Dieter Verhaest () and Eddy Omey ()

No 2009/08, Working Papers from Hogeschool-Universiteit Brussel, Faculteit Economie en Management

Abstract: It is generally found that overeducated workers earn less than adequately educated workers with similar years of education. We investigate whether this finding may be attributed to worker heterogeneity on the basis of panel data for Flemish school leavers and job analysis measurement. The estimated overeducation penalty at labour market entry diminishes but remains statistically significant after the inclusion of individual fixed effects. Yet, this penalty is found to drop with years of work experience. Our outcomes suggest that this drop results at least partly from the selection of overeducated individuals into better paying industries and firms.

Pages: 20 pages
Date: 2009-03
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