Field of study, qualification mismatch, and wages : does sorting matter?

Berlingieri, Francesco ; Zierahn, Ulrich

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URN: urn:nbn:de:bsz:180-madoc-372040
Document Type: Working paper
Year of publication: 2014
The title of a journal, publication series: ZEW Discussion Papers
Volume: 14-076
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: I21 , J24 , J31,
Keywords (English): Qualification mismatch , wages , sorting , graduates , field of study
Abstract: Graduates from Science, Technology, Engineering, and Mathematics (STEM) are usually found to have higher wages and a lower risk of overqualification. However, it is unclear whether we can interpret the effect of STEM subjects on overqualification and wages in a causal way, since individuals choosing these subjects might differ systematically in unobserved characteristics, such as ability. Using data on German male graduates we show that unobserved heterogeneity indeed matters for differences in the risk of overqualification and wages when STEM graduates are compared to the Business & Law group, while it plays only a minor role for the difference between STEM graduates and the Social Sciences & Humanities group.

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