The impact of overeducation on wages of recent economic sciences graduates. An application to the case of the Universidad Nacional de Córdoba

La Plata

Congreso; Reunión Anual de la AAEP; 2018

Universidad Nacional de La Plata

Under the human capital theory, wages are determined by the workerproductivity, which in its crudest form implies the return to education is notcontingent on how the workers´ skills are utilized in the labor market(Sloane, 2002). However, and after controlling for other differences, theempirical evidence has shown that workers with the same education can bepaid differently. The literature has found young people are more likely toexperience a mismatch between their formal education and the onerequired by the job. While there is not a consensus about the reasons forthe mismatch, there is one about the consequences in terms of wages,overeducation means a penalty in terms of income.Our evidence shows that overeducated graduates of the FCE-UNC suffer awage penalty when compared to those working in a job requiring auniversity degree. The results are robust to different specifications and tothe use of alternative estimators. While the difference is not statisticallysignificant, the penalty for those severely overeducated is larger than forthose with a mild level of overeducation. To have working experience whilestuding at the university helps to reduce the cost of overeducation. Theoverall impact found for the whole sample appears to be driven by theimpact of overeducation on female graduates. While for the case ofovereducation we find statistically significant effects, the same is not thecase for the level of horizontal match, either in terms of skills andknowledge.