Has it gone down the drain? The influence of overeducation on the wages of young workers

Purpose: This article aimsto analyse the impact of overeducation on the wage level and wage growth of young workers. Design/methodology/approach: The study uses data from individual administrative records of young people who are entering the labour market for the first time in Spain. Wage-level equa...

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Detalles Bibliográficos
Autores: Arranz Muñoz, José María|||0000-0001-8112-2867, García Serrano, Carlos|||0000-0002-5143-8278
Tipo de recurso: artículo
Fecha de publicación:2025
País:España
Institución:Universidad de Alcalá (UAH)
Repositorio:e_Buah Biblioteca Digital Universidad de Alcalá
Idioma:inglés
OAI Identifier:oai:ebuah.uah.es:10017/67312
Acceso en línea:http://hdl.handle.net/10017/67312
https://dx.doi.org/10.1108/IJM-03-2024-0200
Access Level:acceso abierto
Palabra clave:Overeducation
Young workers
Wage changes
Theory of career mobility
Administrative data
Economía
Economics
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spelling Has it gone down the drain? The influence of overeducation on the wages of young workersArranz Muñoz, José María|||0000-0001-8112-2867García Serrano, Carlos|||0000-0002-5143-8278OvereducationYoung workersWage changesTheory of career mobilityAdministrative dataEconomíaEconomicsPurpose: This article aimsto analyse the impact of overeducation on the wage level and wage growth of young workers. Design/methodology/approach: The study uses data from individual administrative records of young people who are entering the labour market for the first time in Spain. Wage-level equations and wage-dynamics equations considering job mobility either exogenous or endogenous are estimated. Findings: Our results confirm that workers who are overeducated earn less than those who are adequately educated, even if they have the same level of education. This holds true for their first job and for the jobs they hold five and ten years later. However, when overeducated workers change employers, their wage increases are higher than those of adequately educated workers, allowing them to eliminate the initial wage penalty. Thus, our findings are consistent with the theory of career mobility for a portion of young workers. Research limitations/implications: We test whether overeducated individuals experience a wage penalty and whether this penalty diminishes over time, as suggested by the career mobility theory. We focus on young entrants at the start of their careers. Practical implications: A share of the overeducated workers find it difficult to get out of their situation and carry out upward occupational and wage trajectories. Some policy recommendations can be derived from our analyses to reduce the educational mismatch (in particular, its persistence) and the negative consequences that overeducation can produce for workers, companies and the economy in general. Originality/value: We estimate equations for wage changes as a function of initial educational mismatch status. We also take into account the potential endogeneity of job mobility. Both issues are quite novel. Moreover, we focus on young workers(university graduates) who have just entered the labour market; examine the determinants of the wage of their first job, as well asthe job they have five and ten yearslater and analyse the impact of overeducation on wage variation and the role of labour mobility in this regard. We test whether the predictions of career mobility theory are accurate.20252025-03-01journal articlehttp://purl.org/coar/resource_type/c_6501NAhttp://purl.org/coar/version/c_be7fb7dd8ff6fe43info:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10017/67312https://dx.doi.org/10.1108/IJM-03-2024-0200reponame:e_Buah Biblioteca Digital Universidad de Alcaláinstname:Universidad de Alcalá (UAH)Inglésengopen accesshttp://purl.org/coar/access_right/c_abf2Attribution-NonCommercial-NoDerivatives 4.0 Internationalhttp://creativecommons.org/licenses/by-nc-nd/4.0/info:eu-repo/semantics/openAccessoai:ebuah.uah.es:10017/673122026-06-18T11:13:07Z
dc.title.none.fl_str_mv Has it gone down the drain? The influence of overeducation on the wages of young workers
title Has it gone down the drain? The influence of overeducation on the wages of young workers
spellingShingle Has it gone down the drain? The influence of overeducation on the wages of young workers
Arranz Muñoz, José María|||0000-0001-8112-2867
Overeducation
Young workers
Wage changes
Theory of career mobility
Administrative data
Economía
Economics
title_short Has it gone down the drain? The influence of overeducation on the wages of young workers
title_full Has it gone down the drain? The influence of overeducation on the wages of young workers
title_fullStr Has it gone down the drain? The influence of overeducation on the wages of young workers
title_full_unstemmed Has it gone down the drain? The influence of overeducation on the wages of young workers
title_sort Has it gone down the drain? The influence of overeducation on the wages of young workers
dc.creator.none.fl_str_mv Arranz Muñoz, José María|||0000-0001-8112-2867
García Serrano, Carlos|||0000-0002-5143-8278
author Arranz Muñoz, José María|||0000-0001-8112-2867
author_facet Arranz Muñoz, José María|||0000-0001-8112-2867
García Serrano, Carlos|||0000-0002-5143-8278
author_role author
author2 García Serrano, Carlos|||0000-0002-5143-8278
author2_role author
dc.subject.none.fl_str_mv Overeducation
Young workers
Wage changes
Theory of career mobility
Administrative data
Economía
Economics
topic Overeducation
Young workers
Wage changes
Theory of career mobility
Administrative data
Economía
Economics
description Purpose: This article aimsto analyse the impact of overeducation on the wage level and wage growth of young workers. Design/methodology/approach: The study uses data from individual administrative records of young people who are entering the labour market for the first time in Spain. Wage-level equations and wage-dynamics equations considering job mobility either exogenous or endogenous are estimated. Findings: Our results confirm that workers who are overeducated earn less than those who are adequately educated, even if they have the same level of education. This holds true for their first job and for the jobs they hold five and ten years later. However, when overeducated workers change employers, their wage increases are higher than those of adequately educated workers, allowing them to eliminate the initial wage penalty. Thus, our findings are consistent with the theory of career mobility for a portion of young workers. Research limitations/implications: We test whether overeducated individuals experience a wage penalty and whether this penalty diminishes over time, as suggested by the career mobility theory. We focus on young entrants at the start of their careers. Practical implications: A share of the overeducated workers find it difficult to get out of their situation and carry out upward occupational and wage trajectories. Some policy recommendations can be derived from our analyses to reduce the educational mismatch (in particular, its persistence) and the negative consequences that overeducation can produce for workers, companies and the economy in general. Originality/value: We estimate equations for wage changes as a function of initial educational mismatch status. We also take into account the potential endogeneity of job mobility. Both issues are quite novel. Moreover, we focus on young workers(university graduates) who have just entered the labour market; examine the determinants of the wage of their first job, as well asthe job they have five and ten yearslater and analyse the impact of overeducation on wage variation and the role of labour mobility in this regard. We test whether the predictions of career mobility theory are accurate.
publishDate 2025
dc.date.none.fl_str_mv 2025
2025-03-01
dc.type.none.fl_str_mv journal article
http://purl.org/coar/resource_type/c_6501
NA
http://purl.org/coar/version/c_be7fb7dd8ff6fe43
dc.type.openaire.fl_str_mv info:eu-repo/semantics/article
format article
dc.identifier.none.fl_str_mv http://hdl.handle.net/10017/67312
https://dx.doi.org/10.1108/IJM-03-2024-0200
url http://hdl.handle.net/10017/67312
https://dx.doi.org/10.1108/IJM-03-2024-0200
dc.language.none.fl_str_mv Inglés
eng
language_invalid_str_mv Inglés
language eng
dc.rights.none.fl_str_mv open access
http://purl.org/coar/access_right/c_abf2
Attribution-NonCommercial-NoDerivatives 4.0 International
http://creativecommons.org/licenses/by-nc-nd/4.0/
dc.rights.openaire.fl_str_mv info:eu-repo/semantics/openAccess
rights_invalid_str_mv open access
http://purl.org/coar/access_right/c_abf2
Attribution-NonCommercial-NoDerivatives 4.0 International
http://creativecommons.org/licenses/by-nc-nd/4.0/
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.source.none.fl_str_mv reponame:e_Buah Biblioteca Digital Universidad de Alcalá
instname:Universidad de Alcalá (UAH)
instname_str Universidad de Alcalá (UAH)
reponame_str e_Buah Biblioteca Digital Universidad de Alcalá
collection e_Buah Biblioteca Digital Universidad de Alcalá
repository.name.fl_str_mv
repository.mail.fl_str_mv
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