Educational mismatches and earnings in Poland: are the graduates more penalized for being overeducated?

Leszek Wincenciak

Abstract


Qualification mismatch is defined as the difference between the level of qualifications held by employees and those required by the type of work they do. Basing on Kiker et al. (1997) a measure of overeducation and undereducation is proposed based on a classification of occupations, ISCO 08. The dominant education level is determined for given occupation 3-digit group on a basis of the distribution of education levels for employees in given occupation. Each individual having exactly the dominant level of education is considered well matched. Those with higher levels of education are considered overeducated, while those with lower levels are considered undereducated. An extended Mincer wage regression model with Heckman correction for non-random selection is estimated using LFS data for Poland for the second quarter of 2013. Significant wage penalties are found to overeducation status as well as
positive wage premia for being undereducated, which confirms findings that are found in the literature for other countries. Using Duncan and Hoffman (1981) approach, we find significant positive returns to years of overschooling and negative for underschooling. Young participants of the labour market (graduates) are less penalized for being overeducated, which suggests their overeducation is not necessarily a manifestation of lower ability.


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DOI: http://dx.doi.org/10.17451/eko/46/2016/197

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