The wage effects of overeducation across overall wage distribution on university graduates: incidence, heterogeneity and comparison

PurposeThis study aims to investigate the extent to which overeducation imposes wage effects on university graduates, taking into account the individual heterogeneity due to skills and innate ability.Design/methodology/approachUsing Graduates Occupation and Mobility Survey (GOMS) 2019 and Korea Dictionary of Occupations (KDOT) 2019, the overeducated and adequately educated graduates are differentiated by the job analysis (JA) measure. To unveil the masked results, the unconditional quantile regression (UQR) accompanying skills and field of study mismatches is adopted to explore the wage effects of overeducation across the overall wage distribution.FindingsEmpirical evidence shows that the incidence of overeducation is high; however, overeducated graduates only suffer a 6.5% wage loss relative to their adequately matched peers. The findings indicate that regardless of being derived from either overskilled or field of study mismatch, genuine overeducation impose a higher wage penalty at all percentiles relative to the apparent overeducation. Meanwhile, high-ability men suffer lower-wage penalties than their low-ability peers, whereas the inverted “U” pattern is exhibited for women. The theoretical hypotheses differ depending on the estimated results by gender.Research limitations/implicationsEach measure of educational mismatch has been criticized for its insurmountable shortcoming. The recent graduates are likely to overstate the job requires of skills.Originality/valueThis paper contributes to the insufficient evidence on the multiple aspects of wage effects of overeducation by providing new and rigorous examinations and by focusing on the country experiencing rapid economic growth, industrial upgrading and educational expansion.

Do “inferior” jobs always suffer from a wage penalty? Evidence from temporary workers in Cambodia and Pakistan

Purpose This paper aims to investigate the wage gap between temporary and permanent workers in Pakistan and Cambodia. Design/methodology/approach Quantile regression estimator is likely to be the most relevant to the sample. Findings The estimates indicate the presence of a temporary employment wage penalty in Pakistan and contrarily a wage premium in Cambodia. Moreover, quantile regression estimates show that wage differentials could greatly vary across the wage distribution. The wage gap is wider at the bottom of the wage distribution in Pakistan, suggesting a sticky floor effect that the penalty of being in temporary jobs could be more severe for disadvantaged workers. By contrast, a glass ceilings effect is found in Cambodia, indicating that the wage premium is small at the bottom and becomes high at the top of the pay ladder. Originality/value Despite the rise of temporary jobs in the past several decades, the empirical evidence on wage differentials between temporary and permanent workers is extremely limited in developing Asian countries. This paper is the first research work that systematically examines the temporary-permanent wage gap in selected Asian countries, based on their National Labor Force Survey data.

Doctoral Education, Job Mismatch, and Wage Consequences in South Korea: A Propensity Score Matching Approach

This study extends the previous literature on the wage effects of over-education, focusing on young doctorate holders (DHs). It also contributes to the conventional over-education literature on a causal relationship between over-education and wages by implementing techniques of propensity score matching (PSM). By tackling potential bias as a consequence of omitted variable bias via the PSM strategy, this study provides evidence of the negative influence of over-education on wages (i.e., the over-education wage penalty) once potential sources of bias are adequately considered. While the current analysis is focused on one country, South Korea, its results might be relevant for many other countries that have experienced a rapid expansion in the supply of DHs over recent years.

Return migrants and the wage premium: does the legal status of migrants matter?

This paper examines the impact of the legal status of overseas migrants on their wages upon return to the home country. Using unique data from Egypt, which allows us to distinguish between return migrants according to whether their international migration was documented or undocumented, we examine the impact of illegal status on wages upon return. Relying on a Conditional Mixed Process model, which takes into account the selection into emigration, into return, and into the legal status of temporary migration, we find that, upon return, undocumented migrants experience a wage penalty compared with documented migrants, as well as relative to non-migrants. Our results are the first to show the impact of undocumented migration on the migrant upon return to the country of origin.

Global Production System, Textile Industry and Wage Disparity: Evidence from South India

This article discusses the root causes of wage disparity in the textile industry. The study argues that wage disparity arises through direct and indirect approaches. Both create pressure on suppliers and leads to low wage payment, depriving workers of social security benefits, unpaid holidays and leaves. Hyper-consumerism, free on board (FoB) price, and flexibility have created competition among suppliers and other stakeholders. Suppliers flexibilise rules and re-organise work arrangements to meet on-time production by increasing working hours, introducing wage penalty, strict supervising, and increasing surveillance. JEL Codes: J3, J31, J41, J46, J81, J82, J83

Pengaruh Qualification Mismatch terhadap Upah Tenaga Kerja Di Indonesia

Penelitian ini bertujuan untuk memeriksa kejadian qualification mismatch dan pengaruhnya terhadap upah tenaga kerja di Indonesia. Dengan menggunakan SAKERNAS 2018, qualification mismatch diidentifikasi menggunakan metode normatif. Vertical mismatch diperoleh dengan membandingkan tingkat pendidikan dan golongan pekerjaan (KBJI 1 digit), sedangkan horizontal mismatch membandingkan klasifikasi jurusan pendidikan (3 digit ISCED-F) dan klasifikasi jabatan (KBJI 3 digit). Pada tahun 2018, tenaga kerja yang mengalami undereducation berjumlah sebesar 4.6% dan overeducation sebesar 27.9%. Sedangkan kejadian field of study mismatch terjadi pada 68.4% tenaga kerja di Indonesia. Pengaruh qualification mismatch terhadap upah tenaga kerja diestimasi dengan menggunakan metode ordinary least square. Hasil menunjukkan bahwa terdapat wage premium sebesar 5.24%-6.24% pada tenaga kerja yang mengalami undereducation. Wage penalty sebesar 6.26%-7.50% diperoleh tenaga kerja yang mengalami overeducation, sedangkan yang mengalami field of study mismatch sebesar 5.89%-6.80%.

“Physicists” and “lyricists”: Whom the Russian labor market values higher?

In this study, we raise a simple question: do STEM (Science, Technology, Engineering and Math) education and employment provide a monetary return to professionals with this specialization and holding STEM jobs? If yes, what is the premium across ages and cohorts? We compare wages of professionals with the STEM education and without it, holding STEM jobs and those working in alternative positions, and with various combinations of education and jobs. We estimate premiums for the whole sample as well as for different age groups and cohorts. For this, we use various large data sets with variables for college majors and occupational positions. The main conclusion is that the STEM specialization brings no significant benefits compared to non-STEM majors and jobs. The premium does not emerge over experience or age; moreover, older groups engaged in STEM-related work tend to experience a wage penalty. As we move from younger to older age cohorts, the wage growth declines which means that wages for younger age cohorts catch up and take over the older ones, even if they were initially lower. These results are reproduced on all available datasets.

The impact of overeducation on wages of recent economic sciences graduates

According to human capital theory, wages are determined by workers' productivity, in its crudest form implies that return to education does not depend on how workers' skills are used. However, after controlling for other differences, the empirical evidence shows that workers with identical education can be paid differently. The literature has found young people are more likely to experience a mismatch between their formal education and that required for their jobs. While there is no consensus on the reasons for the mismatch, there is one on the consequences in terms of wages; overeducation means a penalty. Our evidence shows that overeducated graduates of the Facultad de Ciencias Económicas of the Universidad Nacional de Córdoba suffer a wage penalty compared to those working in a job that requires a university degree. The results are robust to different specifications and the use of alternative estimators. Even when not statistically significant, the penalty of a severe level of overeducation is higher than one for a mild level of overeducation; having had work experience while studying at university helps to reduce the cost of overeducation; women exhibit a similar penalty to men. While on average overeducation means a wage penalty, there is great heterogeneity among overeducated graduates, with those at the top end of the wage distribution experiencing a much lower penalty, or even a premium in some cases. Finally, while in the case of overeducation we find statistically significant effects, the same is not true of the horizontal mismatch in terms of knowledge.