Who Is Your Perfect Match? Educational Norms, Educational Mismatch and Firm Profitability

Stephan Kampelmann, Benoît Mahy (), Francois Rycx and Guillaume Vermeylen ()
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Benoît Mahy: University of Mons

No 10399, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We provide first evidence regarding the direct effect of educational norms and educational mismatch on the bottom line of firms across work environments. To do so, we use rich Belgian linked employer-employee panel data, rely on the methodological approach pioneered by Hellerstein et al. (1999), and estimate dynamic panel data models at the firm level. Our findings show an 'inverted L' profitability profile: undereducation is associated with lower profits, whereas higher levels of normal and overeducation are correlated with positive economic rents of roughly the same magnitude. The size of these effects is amplified in firms experiencing economic uncertainty or operating in high-tech sectors.

Keywords: linked panel data; educational mismatch; productivity-wage gaps (search for similar items in EconPapers)
JEL-codes: J21 J24 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2016-11
New Economics Papers: this item is included in nep-bec, nep-eff and nep-lma
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Published - published as 'Over-, Required and Under-education: Consequences on the Bottom Line of Firms' in: Labour, 2020, 34 (1), 80-112

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Related works:
Working Paper: Who is your perfect match? Educational norms, educational mismatch and firm profitability (2016)
Working Paper: Who is your perfect match? Educational norms, educational mismatch and firm profitability (2016)
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