Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/110776
Authors: 
Caroleo, Floro Ernesto
Pastore, Francesco
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 9049
Abstract: 
This paper aims to survey the theoretical and empirical literature on cross-country differences in overeducation. While technological change and globalization have entailed a skill-bias in the evolution of labour demand in the Anglo-Saxon countries, instead, in other advanced economies in Western Europe the increased educational level has not been associated with a parallel raise in the share of skilled occupations, therefore generating skills mismatch. This suggests that a demand-side explanation of overeducation is justified in Western Europe, which would be also confirmed by circumstantial evidence coming from the recent literature. Nonetheless, overeducation may also turn to be positive in the long run if the expansion of the supply of skills generates a technological upgrading of the production system. Moreover, from a micro-economic point of view, recent theoretical and empirical studies tend to justify a human capital theory based interpretation of the phenomenon, whereas the disorganization of the educational system, its degree of integration with the labour market may play an important role in helping young graduates develop the work experience and the competences they need to prevent them from experiencing overeducation. Overeducation causes a penalty to individuals in terms of earnings and employment opportunities and a waste of resources to the society at large in terms of state investment into education that do not bear its yields. Both penalties are higher not only where the demand for skill is lower, but also where school-to-work transition systems fail to effectively address the aim of generating competences rather than only education for their graduates.
Subjects: 
school-to-work transition
university graduates
AlmaLaurea
overeducation
overskilling
earnings
(ordered) probit
sample selection bias
Heckit
Italy
JEL: 
C25
C26
C33
I2
J13
J24
Document Type: 
Working Paper

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