Skills heterogeneity among graduate workers: real and apparent overeducation in the Spanish labor market

Mateos-Romero, Lucía and Salinas Jiménez, María del Mar (2015): Skills heterogeneity among graduate workers: real and apparent overeducation in the Spanish labor market.

Abstract

This paper relaxes the assumption of homogeneous skills among graduate workers and proposes a new approach to differentiate between real and apparent overeducation based on the level of cognitive skills actually achieved by the individuals. This proposal is applied to the study of the wage effects of overeducation in the Spanish labor market using data from PIAAC. The results suggest that between a quarter and a half of the graduate workers who appear to be overeducated in the Spanish labor market could be considered as being only apparently overeducated since they show a lower level of skills than that corresponding to their educational level or, alternatively, a level of cognitive skills which is commensurate with their job. Different returns are found for each group of overeducated individuals both when compared with adequately educated peers within a similar level of education (with greater wage penalties for apparently overeducated workers) and when the comparison is done with well-matched co-workers doing a similar job (with a wage premium for real overeducation but no significant returns for apparently overeducated workers). These results point to the need of taking account of skills heterogeneity within an educational level when returns to overeducation are analyzed.

• Item Type: MPRA Paper
• Language: English
• Keywords: educational mismatch; skills heterogeneity; real and apparent overeducation
• Subjects: A - General Economics and Teaching > A2 - Economic Education and Teaching of Economics > A23 - Graduate; I - Health, Education, and Welfare > I2 - Education and Research Institutions > I26 - Returns to Education; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity

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