EconPapers    
Economics at your fingertips  
 

Signalling and Productivity Effects of Overeducation: Is It Really a Waste of Resources?

Abbi Kedir (), Andri Kyrizi () and Francisco Martínez-Mora

No 12/19, Discussion Papers in Economics from Division of Economics, School of Business, University of Leicester

Abstract: Overeducation raises concerns that governments may be overinvesting in education. To inform the debate, this paper studies the impact of overeducation on productivity. We advance the literature by considering that returns to overeducation may be due both to productivity and signalling effects. To disentangle both effects, we apply Wolpin’s (1977) methodology and compare the rates of return of screened (employed) and unscreened (self-employed) workers. To overcome well-known endogeneity problems due to unobserved heterogeneity, we estimate a panel with individual and employment-status fixed effects. Our results show that signalling effects are relevant and that overeducation does not carry a productivity penalty.

Keywords: Overeducation; signalling model; human capital model; unobserved heterogeneity (search for similar items in EconPapers)
JEL-codes: I20 J24 J31 (search for similar items in EconPapers)
Date: 2012-09
New Economics Papers: this item is included in nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.le.ac.uk/economics/research/RePEc/lec/leecon/dp12-19.pdf (application/pdf)

Related works:
Working Paper: Signalling and Productivity Effects of Overeducation: Is It Really a Waste of Resources? (2012) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lec:leecon:12/19

Ordering information: This working paper can be ordered from
https://www2.le.ac.u ... -1/discussion-papers

Access Statistics for this paper

More papers in Discussion Papers in Economics from Division of Economics, School of Business, University of Leicester School of Business, University of Leicester, University Road. Leicester. LE1 7RH. UK Provider-Homepage: https://le.ac.uk/school-of-business. Contact information at EDIRC.
Bibliographic data for series maintained by Abbie Sleath ().

 
Page updated 2024-06-28
Handle: RePEc:lec:leecon:12/19