Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/58987 
Year of Publication: 
2012
Series/Report no.: 
IZA Discussion Papers No. 6413
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
The academic circles are devoting a growing interest to delayed graduation and overeducation, but none has analyzed the joint consequences of these two phenomena. Thus, this paper studies the link between graduation not within the minimum period and overeducation, and the effects of these variables on wages, using the ISFOL-Plus data. According to the human capital model, delayed graduation increases a student' human capital and should, therefore, reduce her probability of being overeducated, while increasing her wage. According to the screening hypothesis, instead, delayed graduation signals low skills and therefore increases the chances of being overeducated, while bearing a wage penalty. The evidence lines towards predictions based on the screening hypothesis. First, delayed graduation increases the chances of overeducation. In addition, the direct wage penalty associated to delayed graduation equals 7% of the median wage. However, being a determinant of overeducation, it also indirectly contributes to the penalty of 19.8% of the median wage associated to overeducation. These effects are sizeable, considering the very low returns to higher education in Italy reported in previous studies.
Subjects: 
university-to-work transition
delayed graduation
overeducation
human capital theory
screening hypothesis
earnings equations
Italy
JEL: 
C25
C26
C33
I2
J13
J24
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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