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 in Spain and its effect on earnings. Using the last four waves (2009–2012) of the European Union Statistics on Income and Living Conditions (EU-SILC, 2009–2012) this study analyses over-education situation of employed people and compares over-education rates and earnings of these individuals. Cross-sectional analysis (focused on a 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. The results obtained in this paper add more empirical evidence supporting the effect of education on earnings together with occupational placement because over-education could be a great problem for many countries. 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. Besides, 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 over-educated receive less earnings than they correspond to. In fact, the decrease can reach about 5000 euro per year.
Similar content being viewed by others
References
Alba-Ramírez, A. (1993). Mismatch in the Spanish labor market: Over-education? Journal of Human Resources, 28, 259–278.
Alba-Ramírez, A., & San Segundo, M. J. (1995). The returns to education in Spain. Economics of Education Review, 14, 155–166.
Angrist, J. D., & Imbens, G. W. (1995). Two-stage least squares estimation of average causal effects in models with variable treatment intensity. Journal of the American Statistical Association, 90, 431–442.
Becker, G. S., & Chiswick, B. R. (1966). Education and the distribution of earnings. American Economic Review, 56, 358–369.
Becker, S., & Ichino, A. (2002). Estimation of average treatment effects based on propensity scores. The Stata Journal, 2(4), 358–377.
Büchel, F. (2000). Tied movers, tied stayers: The higher risk of overeducation among married women in West Germany. In S. S. Gustafsson & D. E. Meulders (Eds.), Gender and the labour market (pp. 133–148). London/New York: Macmillan Press.
Büchel, F., & Battu, H. (2003). The theory of differential overqualification: Does it work? Scottish Journal of Political Economy, 50(1), 1–16.
Büchel, F., & van Ham, M. (2003). Overeducation, regional labor markets, and spatial flexibility. Journal of Urban Economics, 53(3), 482–493.
Cantarero, D., Pascual, M., & María Sarabia, J. (2005). Effects of income inequality on population health: New evidence from the European Community Household Panel. Applied Economics, 37, 89–91.
Cohn, E., & Khan, S. (1995). The wage effects of overschooling revisited. Labour Economics, 2(1), 67–76.
Creedy, J. (1977). The distribution of lifetime earnings. Oxford Economic Papers, 29, 412–429.
Duncan, G., & Hoffman, S. (1981). The incidence and wage effects of overeducation. Economics of Education Review, 1(1), 75–86.
Fields, G. (1995). Educational expansion and labor markets, 2ª ed. Oxford: Pergamon Press.
Folger, John K., & Nam, Charles B. (1964). Trends in education in relation to the occupational structure. Sociology of Education, 38, 19–33.
Forgeot, G., & Gautier, J. (1997). Insertion professionnelle et processus de déclassement. Economie et Statistique, 304–305(4–5), 53–74.
Frank, R. (1978). Why women earn less: The theory and estimation of differential overqualification. American Economic Review, 68, 360–372.
Franz, Wolfgang. (1991). Arbeitsmarktökonomik. Berlin: Springer.
Freeman, R. (1976). The overeducated American. New York: Academic Press.
García-Mainar, I., García-Martín, G., & Montuenga, V. (2014). Over-education and gender occupational differences in Spain. Social Indicators Research,. doi:10.1007/s11205-014-0811-7).
García Montalvo, J. (1995). Empleo y sobrecualificación: El caso español. DOCT FEDEA 95-20.
Hartog, J. (2000). Over-education and earnings: Where are we, where should we go? Economics of Education Review, 19, 131–147.
Hartog, J., & Oosterbeek, H. (1988). Education, allocation and earnings in the Netherlands: Overschooling? Economics of Education Review, 7(2), 185–194.
Kiker, B., & Santos, M. (1991). Human capital and earnings in Portugal. Economics of Education Review, 10(3), 187–203.
Kiker, B. F., Santos, M. C., & de Oliveira, Mendes. (1997). Overeducation and undereducation: Evidence for Portugal. Economics of Education Review, 16(2), 111–125.
Klesment, M., Puur, A., Rahnu, L., & Sakkeus, L. (2014). Varying association between and second births in Europe: Comparative analysis based on the EU-SILC data. Demographic Research, 31, 813–860.
Leuven, E., & Oosterbeek, H. (2011). Overeducation and mismatch in the labour market. In E. A. Hanushek, S. Machin & L. Woessmann (Eds.), Handbook of the economics of education (Vol. 4, pp. 283–326). Amsterdam: North Holland.
Madrigal, M. (2002). Consideraciones sobre la medición del desajuste educativo. XI Jornadas de la Asociación de Economía de la Educación, Lisbon, September 27–28th, 2002.
Mendes de Oliveira, M., Santos, M. C., & Kiker, B. F. (2000). The role of human capital and technological change in overeducation. Economics of Education Review, 19, 199–206.
Morgan, W. J., & Scott, N. T. (1987). Unemployed graduates: A wasted national resource. London/Nottingham: Further education Unit.
OECD. (2012). Education statistics. Paris: OECD.
Rosenbaum, P. R., & Rubin, D. B. (1983). The central role of the propensity score in observational studies for causal effects. Biometrika, 70, 41–55.
Rubinson, R., & Browne, I. (1994). Education and economy. In N. J. Smelser & R. Swedberg (Eds.), The handbook of economic sociology (pp. 581–599). Princenton y Nueva York: Princenton University ress y Russell Sage Foundation.
Rumberger, R. (1987). The impact of surplus schooling on productivity and earnings. Journal of Human Resources, 22, 24–50.
Sanromá, E., & Ramos, R. (2004). Over-education and local labour markets in Spain. 44th Congress of the European Regional Science Association, Porto, August 2004.
Sicherman, N. (1991). Overeducation in the labor market. Journal of Labor Economics, 9(2), 101.
Simpson, W. (1992). Urban structure and the labour market: Worker mobility, commuting and underemployment in cities. Oxford: Clarendon Press.
Spanish Labour Force Survey (Encuesta de Población Activa-EPA). (2013). Spanish National Statistical Institute (INE), Madrid, Spain.
Tsang, M. C. (1987). The impact of underutilization of education on productivity: A case study of the U.S. Bell Companies. Economics of Education Review, 6, 239–254.
Tsang, M. C., & Levin, H. M. (1985). The economics of overeducation. Economics and Education Review, 4(2), 93–104.
Verdugo, R., & Verdugo, N. (1989). The impact of surplus schooling on earnings: Some additional findings. Journal of Human Resources, 24(4), 629–643.
Wooldridge, J. (2002). Econometric analysis of cross section and panel data. Cambridge: MIT Press.
Acknowledgments
The authors are grateful to the editor and anonymous referees for their valuable comments on an earlier draft of this paper.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Pascual Sáez, M., González-Prieto, N. & Cantarero-Prieto, D. Is Over-Education a Problem in Spain? Empirical Evidence Based on the EU-SILC. Soc Indic Res 126, 617–632 (2016). https://doi.org/10.1007/s11205-015-0916-7
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11205-015-0916-7