Overeducation and Mismatch in the Labor Market

Edwin Leuven and Hessel Oosterbeek

No 5523, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper surveys the economics literature on overeducation. The original motivation to study this topic were reports that the strong increase in the number of college graduates in the early 1970s in the US led to a decrease in the returns to college education. We argue that Duncan and Hoffman’s augmented wage equation – the workhorse model in the overeducation literature – in which wages are regressed on years of overschooling, years of required schooling and years of underschooling is at best loosely related to this original motivation. We discuss measurement and estimation issues and give an overview of the main empirical findings in this literature. Finally we given an appraisal of the economic lessons learned.

Keywords: wage equation; underschooling; overschooling; mismatch (search for similar items in EconPapers)
JEL-codes: I2 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2011-02
New Economics Papers: this item is included in nep-edu and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (228)

Published - published in: Handbook of the Economics of EducationErik Hanushek, F. Welch (eds.): Handbook of the Economics of Education, Elsevier Science, Vol. 4, 283 - 326

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Chapter: Overeducation and Mismatch in the Labor Market (2011)
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