The over-education wage penalty among PhD holders: a European perspective

Francois Rycx, Giulia Santosuosso and Guillaume Vermeylen

No 22-009, Working Papers CEB from ULB -- Universite Libre de Bruxelles

Abstract: While the literature on the incidence and wage effects of over-education is substantial, specific results for doctoral graduates are surprisingly scarce. This article aims to fill this gap, not only by measuring the prevalence of over-educated PhD holders in Europe (i.e. in EU Member States and the UK), but also by estimating their wage penalty relative to what they could have earned in a job corresponding to their level of education. Using a unique pan-European dataset, we rely on two alternative measures of over-education and control stepwise for four groups of covariates (i.e. socio-demographic characteristics, skills needed for the job, other job-specific characteristics and motivations for employment) in order to interpret the over-education wage penalty in light of theoretical models. Depending on the specification adopted, we find that over-educated PhD holders face a wage penalty ranging from 25 to 13.5% with respect to their well-matched counterparts. Our results also show that the over-education wage penalty is significantly higher for PhD holders who are both over-educated and over-skilled and especially for those who are both over-educated and dissatisfied with their jobs. Finally, unconditional quantile regressions highlight that the over-education wage penalty among PhD holders increases greatly along the wage distribution.

Keywords: PhD Graduates; Over-Education; Over-Skilling; Job Satisfaction; Wages; Europe (search for similar items in EconPapers)
JEL-codes: J21 J24 (search for similar items in EconPapers)
Date: 2022-07-13
New Economics Papers: this item is included in nep-eec, nep-eur and nep-lma
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Related works:
Journal Article: The over-education wage penalty among PhD holders: a European perspective (2025)
Working Paper: The Over-education Wage Penalty Among PhD Holders: A European Perspective (2022)
Working Paper: The Over-Education Wage Penalty among PhD Holders: A European Perspective (2022)
Working Paper: The Over-education Wage Penalty Among PhD Holders: A European Perspective (2022)
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