Overeducation, Wages and Promotions within the Firm

Sandra Groeneveld () and Joop Hartog
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Sandra Groeneveld: Erasmus University Rotterdam

No 883, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We analyse data from personnel records of a large firm producing energy and telecommunication and test for the effect of deviations between required and attained education of workers. Required education is measured as hiring standards set by the firm. We find the usual effects of over- and undereducation in a wage regression, thus rejecting the argument that such effects are exclusively due to firm fixed effects. Distinguishing, within the firm, between a sheltered internal labour market and an exposed external labour market, we find that at the internal labour market over- and undereducation significantly affect career development, in particular at younger ages, but that such effects are mostly absent at the firm’s external labour market.

Keywords: career mobility; wages; overeducation; education; promotions (search for similar items in EconPapers)
JEL-codes: J31 J41 M51 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2003-10
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (2)

Published - published in: Labour Economics, 2004, 11 (6), 701-714

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Journal Article: Overeducation, wages and promotions within the firm (2004)
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