Unemployment or Overeducation: Which is a Worse Signal to Employers?
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This study estimates the stigma effect of unemployment and overeducation within one framework. We conduct a randomised field experiment in which we send out trios of fictitious job applications, from male candidates with no relevant work experience, to real vacancies. One candidate graduated just a few months before the application, the two others graduated a year earlier and had been unemployed or underemployed since that time. By monitoring the subsequent callback, we find evidence of a larger stigma effect of unemployment than overeducation. The stigma effect of overeducation is found to occur for permanent contract jobs but not for temporary ones.
KeywordsUnemployment signalling Overeducation signalling Transitions in youth
JEL ClassificationJ24 J60 C93
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