A mismatch made in Heaven: a hedonic analysis of overeducation and undereducation

Daniel P. McMillen, Paul T. Seaman, Larry D. Singell

    Research output: Contribution to journalArticle

    7 Citations (Scopus)

    Abstract

    In this paper, a hedonic pairing process is modeled in which some workers may be overeducated or undereducated as an equilibrium outcome of a dynamic labor market. Undereducated workers are those whose abilities and training permit them to move into a job with higher qualifications, whereas overeducated workers are highly qualified workers who select into lower-skill, entry-level jobs that provide the training (or signal) necessary for promotion. The empirical model shows that these pairing types cannot be directly identified in a cross section since all workers are exactly educated during a portion of their career. However, pairing types may be imputed by comparing predicted and observed qualifications of the worker and predicted and observed requirements of the firm. Using a rich cross section and a panel of British working-age males to identify the pairing types, we confirm the predicted career development patterns with regard to on-the-job training, promotion, and wages.
    Original languageEnglish
    Pages (from-to)901-930
    Number of pages30
    JournalSouthern Economic Journal
    Volume73
    Issue number4
    Publication statusPublished - 2007

      Fingerprint

    Cite this