Education, Educational Mismatch, and Wage Inequality: Evidence for Spain

Santiago Budria Rodriguez () and Ana Moro-Egido

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper we explore the connection between education and wage inequality in Spain for the period 1994-2001. Drawing on quantile regression, we describe the conditional wage distribution of different populations groups. We find that higher education is associated with higher wage dispersion. According to this, the educational expansion that took place in Spain over the last years contributed to raise wage inequality through the within- dimension. A contribution of the paper is that we explicitly take into account the fact that workers who are and workers who are not in jobs commensurate with their qualifications have a different distribution of earnings. We differentiate between three different types of educational mismatch: ‘over-qualification’, ‘incorrect qualification’, and ‘strong mismatch’. We find that while over-qualification and incorrect qualification are not associated with lower wages, strong mismatch carries a pay penalty that ranges from 13% to 27%. Thus, by driving a wedge between matched and mismatched workers, the incidence of strong mismatch contributes to enlarge wage differences within education groups. We find that over the recent years, the proportion of strongly mismatched workers rose markedly in Spain, contributing towards further within-groups dispersion.

Keywords: Returns to education; educational mismatch; quantile regression (search for similar items in EconPapers)
JEL-codes: C29 D31 (search for similar items in EconPapers)
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Journal Article: Education, educational mismatch, and wage inequality: Evidence for Spain (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:93

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