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The impact of over-education on wages in Spain: empirical based on the EU-SILC and matching techniques

Abstract: Spain is suffering an important economic slowdown which affects significantly to unemployment rises. For this reason, many individuals are considering to increase their educational level. However, this decision can lead to get worse labor market indicators. In this paper, we analyze the problem of over-education and its effect on earnings in Spain. Using the European Union Statistics on Income and Living Conditions (EU-SILC, 2009-2012) this study analyses overeducation situation of people employed and compares over-education rates and earnings of these individuals. Crosssectional analysis (focused on a current or recent period of time) is performed. We apply different matching techniques based on propensity score methods to evaluate the impact of over-education on personal earnings. In Spain, there exists a problem of over-education which varies among occupations. Overeducated workers are most likely to be found among “Service workers and shop and market sales workers” and "Elementary occupations". Also, the majority of individuals working as “Professionals” are adequately educated. Over-education has a significant negative impact on earnings. Although the results depend on the way we define over-education (interval or modal method), those individuals overeducated receive less earnings than they correspond to. In fact, the decrease can reach 5.000 euro per year. The results obtained in this paper add more empirical evidence supporting the effect of education on earnings which needs to be considered together with occupational placement because over-education could be a great problem for many countries

 Fuente: Anales de economía aplicada, 2014, 232-246

 Editorial: Delta

 Año de publicación: 2014

 Nº de páginas: 15

 Tipo de publicación: Artículo de Revista

 ISSN: 2174-3088

Autoría

NOELIA GONZALEZ PRIETO