Overeducation and Economic Mobility

Simen Markussen, Maria Nareklishvili and Knut Røed ()
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Maria Nareklishvili: Ragnar Frisch Centre for Economic Research

No 16798, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We assess the hypothesis that declining intergenerational economic mobility in Norway is attributable to a rising signaling value of education accompanied by more overeducation particularly among upperclass offspring. We identify five empirical facts that together point in this direction: • The educational earnings premium has risen, but only through the extensive (employment) margin. • The earnings premium has increased more when education is measured as years corresponding to completed degrees than when measured as time actually invested. • Both educational attainment and the labor market's skill-requirements (as predicted by the occupational distribution) have increased, but attainment has risen faster than requirements such that the incidence of overeducation has increased. • There is a steep positive social gradient in overeducation: Overeducation is more frequent and has risen faster among offspring in upper-class families. • There is a steep negative social gradient in non- employment: Non-employment is more frequent and has risen faster among offspring in lower-class families.

Keywords: returns to education; intergenerational mobility; overeducation; signaling (search for similar items in EconPapers)
JEL-codes: I21 I26 J24 J62 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2024-02
New Economics Papers: this item is included in nep-lma
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Published - published in: Economics of Education Review, 2024, 103, 102595

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Journal Article: Overeducation and economic mobility (2024)
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