Dynamics of overqualification : evidence from the early career of graduates

Erdsiek, Daniel

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URL: https://ub-madoc.bib.uni-mannheim.de/43351
URN: urn:nbn:de:bsz:180-madoc-433510
Document Type: Working paper
Year of publication: 2017
The title of a journal, publication series: ZEW Discussion Papers
Volume: 17-020
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 , I23 , J24,
Keywords (English): Overqualification , overeducation , persistence , state dependence , dynamic random-effects probit
Abstract: This study analyses the persistence and true state dependence of overqualification, i.e. a mismatch between workers' qualifications and their jobs educational requirements. Employing individual-level panel data for Germany, I find that overqualification is highly persistent among tertiary graduates over the first ten years of their career cycle. Accounting for unobserved heterogeneity, results from dynamic random-effects probit models suggest that only a small share of the observed persistence can be attributed to a true state dependence effect. Unobserved factors are found to be the main driver of the high persistence of overqualification. In particular, selection into initial overqualification at the start of the career is of high importance. Furthermore, overqualification persistence is shown to be partly attributable to observed heterogeneity in terms of ability and study characteristics.

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