Educational mismatches and skills: New empirical tests of old hypotheses

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Abstract

In this paper, we empirically explore how the often reported relationship between overeducation and wages can best be understood. Exploiting the newly published Programme for International Assessment of Adult Competencies (PIAAC) data (OECD 2013), we are able to achieve a better estimation of the classical ORU-model (Duncan and Hoffman, 1981), by controlling for heterogeneity of observable skills. Our findings suggest that 1) a considerable part of the effect of educational mismatches can be attributed to skills heterogeneity, and 2) that the extent to which skills explain educational mismatches varies by institutional contexts. These observations suggest that skills matter for explaining wage effects of education and educational mismatches, but the extent to which this is the case also depends on institutional contexts.
Original languageEnglish
Place of PublicationMaastricht
PublisherMaastricht University, Graduate School of Business and Economics
DOIs
Publication statusPublished - 1 Jan 2013

Publication series

SeriesGSBE Research Memoranda
Number062

Cite this

Levels, M., van der Velden, R. K. W., & Allen, J. P. (2013). Educational mismatches and skills: New empirical tests of old hypotheses. Maastricht University, Graduate School of Business and Economics. GSBE Research Memoranda, No. 062 https://doi.org/10.26481/umagsb.2013062