150 W. Groot, H. Maassen van den Brink Economics of Education Review 19 2000 149–158
1996 and Sicherman 1991 find that overeducated workers have less experience, tenure and on-the-job
training than correctly allocated workers. Groot and Maassen van den Brink 1996 find that workers who
have experienced a career interruption — such as women with children — are more likely to be in jobs for which
they are overeducated. Another explanation is that overe- ducation is part of a career mobility or insertion process
in the labor market. Workers may enter the labor market in jobs for which they are overeducated and later on
move to jobs that more match their educational attain- ment. Groot 1996 and Groot and Maassen van den
Brink 1996 find that — after controlling for experi- ence — younger workers are more likely to be overedu-
cated than older workers. Further, in Sicherman 1991 it is found that overeducated workers change jobs more
frequently. This also suggests that overeducation is part of a phase of adaptation in the early stages of working
life.
In the past two decades a number of studies have appeared on the incidence of qualification mismatches in
the labor market and on the pay-off for formal edu- cational qualifications that are not fully required for the
job. The main aim of this paper is to review what 20 years of research on the incidence and returns to overed-
ucation has taught us. For this purpose a meta-analysis of the available studies on overeducation is presented.
A quick overview of the literature on overeducation shows that there is no uniform definition of overeduc-
ation. At least four different definitions can be dis- tinguished in the literature. In Section 2 the different
ways in which the ‘overeducation’ concept is oper- ationalized are described briefly for a more detailed dis-
cussion, see Hartog, 2000. There it is also argued that none of the four definitions is universally preferred over
the other and that each of the different definitions has its advantages and drawbacks.
Perhaps more relevant than a discussion on how to define overeducation, is the question whether the way
the concept is defined really matters: do some of the overeducation concepts lead to other conclusions about
the incidence of, and the returns to overeducation than others? This question is addressed in Section 3 where
the results of the meta-analysis are presented. One of the purposes of the meta-analysis is to establish how the rate
of skill mismatches and the returns to overeducation vary with characteristics of the sample used, the operationaliz-
ation of variables and institutional characteristics.
1
The meta-analysis not only provides an answer to the ques-
1
One of the criticisms of meta-analysis is that, contrary to to traditional literature reviews, meta-analysis does not discuss
the studies being reviewed, looking for patterns and inconsist- encies, and placing more weight on better-quality studies than
on poorer studies see Wolf, 1986.
tion whether the definition of overeducation affects out- comes but also on questions such as:
1. Has the
incidence of
educational mismatches
increased over time? And has the allocation on the labor market become less efficient?
2. Have the returns to overeducation and undereducation changed over time?
3. Are there gender differences in overeducation? 4. Are there differences in the incidence and pay-off to
overeducation between European countries and the United States?
5. Do aggregate variables such as the unemployment rate or the labor force growth rate have an effect
on overeducation?
2. The definition of educational mismatches and description of the studies used in the meta-analysis
Broadly speaking, four ways of defining skill mis- matches can be distinguished in the literature. These four
can be classified into ‘objective’ and ‘subjective’ defi- nitions. The subjective definitions are based on self-
reports by individual workers on the rate of skill utiliz- ation. Either workers are asked directly whether they are
overeducated or undereducated for the work they do, or workers are asked what the minimum educational
requirements are for a new worker in the job. In the latter case, the self-report on the required education level
is compared with the actual education level of the worker to determine whether the worker is overeducated or not.
The ‘objective’ definitions can be classified in two types as well. In the first, overeducation is defined by compar-
ing years of education attained with the average edu- cation level within the occupation of the worker. This
classifies a worker as being overeducated if heshe has more years of education than the average years of edu-
cation within the workers’ occupation plus one standard deviation. The second ‘objective’ definition is based on
a comparison between the actual education level and job- level requirements. All of the definitions have their draw-
backs and limitations; for a discussion on these, see Clogg and Shockey 1984, Dolton and Vignoles 2000,
Halaby 1994 and Hartog 2000.
Table 1 summarizes 25 studies on overeducation.
2
The table provides information on the year of data collection,
the definition of the overeducation variable, the specifi- cation of the wage equation for measuring the returns to
overeducation, the
incidence of
skill mismatches
2
Some authors use the same results in different papers. In cases where the same results were used in multiple papers, we
have included only one of the papers in our survey.
151 W.
Groot, H.
Maassen
van den
Brink Economics
of Education
Review 19
2000 149–158
Table 1 Survey of research on overeducation in the labor market
Study Year
Definition
a
and Incidence of
Incidence of Rate of return
Rate of return Rate of return
Rate of return specification
b
overeducation undereducation
to years of to years of
to to
malefemale malefemale
education education
overeducation undereducation
attained required
malefemale malefemale
malefemale malefemale
Alba-Ramirez 1993 1985
D I
15.320.6 28.013.8
9.2 4.0
26.0 Beneito, Rerri, Molto´ Uriel 1996
1990 B
15.2 15.3
C I
27.9 10.9
3.3 1.9
23.3 D
25.6 16.5
Cohn Kahn 1995 1985
B I
13 12
8.4 5.9
24.4 D
I 33
20 7.7
4.9 23.8
Daly, Bu¨chel Duncan 2000 1976
D I
38.536.8 16.311.3
6.19.0 4.56.1
23.423.6 1985
D I
31.833.5 21.216.8
7.810.9 5.48.6
21.622.5 1984
D I
14.320.7 6.97.4
9.09.0 4.96.6
27.823.8 Dolton Vignoles 2000
1986 D
I 2931
Duncan Hoffman 1981 1976
D I
42 12
3 24.2
Groeneveld 1996 1994
A 30.7
D 19.3
C 13.4
Groot 1993 1983
B III
16.0 21.8
5.5 27.4
2.6 Groot 1996
1991 B
I 1310
108 4.55.6
7.99.4 22.623.0
12.210.9 Groot Maassen van den Brink 1997
1991 B
I 1310
108 4.55.6
7.99.4 22.623.0
12.210.9 Groot Maassen van den Brink 1996
1995 C
19.333.4 14.68.1
Halaby 1994 19731977A
19 B
17 C
30 Hartog 1985
1977 A
I 25.7
20.6 Hartog Oosterbeek 1988
1982 D
I 21.8
16.0 6.54.7
7.65.2 6.53.7
21.924.0 Hartog Tsang 1989
1969 D
I 9.5
6.2 23.9
1973 D
I 7.8
4.4 22.1
1977 D
I 8.9
5.1 21.3
McGoldrick Robst 1996 1985
B 15.89.3
D 30.131.5
Oosterbeek Webbink 1996 1995
B I
6.86.2 9.27.9
5.26.3 23.321.1
continued on next page
W. Groot,
H. Maassen
van den
Brink Economics
of Education
Review 19
2000 149–158
Table 1 continued Study
Year Definition
a
and Incidence of
Incidence of Rate of return
Rate of return Rate of return
Rate of return specification
b
overeducation undereducation
to years of to years of
to to
malefemale malefemale
education education
overeducation undereducation
attained required
malefemale malefemale
malefemale malefemale
Robst 1995 1976,
D 36
20 1978,
1985 Rumberger 1981
1977 A
I 11–17
6.111.5 2.86.1
D I
16 5.210.0
3.15.7 Santos 1992
1985 B
I 15.420.0
6.43.7 3.53.4
1.50.9 21.90.7
Santos, Mendes Oliveira Kiker 1996 1991 A
I 28.840.0
44.225.9 10.010.4
3.43.0 23.926.6
B II
10.96.9 5.34.7
6.45.6 29.523.6
16.515.6 Sicherman 1991
19761978D I
40.8 16.0
3.8 4.8
3.9 21.7
Sloane, Battu Seaman 1995 1986
D I
30.132.3 19.212.1
3.32.5 24.80.5
Smoorenburg Van der Velden 2000 1994
D I
39 2
6.6 4.8
27.1 Verdugo Verdugo 1989
1980 B
II 10.9
9.9 7.2
213.0 9.6
a
Definition of overundereducation: A based on job level or DOT classification; B based on average years of education within occupation; C self-report on skill utilization; D based on self-report on skill requirements for new workers on the job.
b
Specification of the wage equation: I including years of education required, years of overeducation and years of undereducation; II including years of education attained, a dummy variable for overeducation and a dummy variable for undereducation; III including years of education attained, years of overeducation and years of undereducation.
153 W. Groot, H. Maassen van den Brink Economics of Education Review 19 2000 149–158
reported in the study, and the estimated rates of return to education attained, education required for the job,
overeducation and
undereducation. We
have dis-
tinguished four different ways of operationalizing overe- ducation: definition A — based on job level or DOT
classification; definition B — based on average years of education within occupation; definition C — self-report
on skill utilization; definition D — based on self-report on skill requirements for new workers on the job.
Table 1 shows that there is considerable variation in the incidence of skill mismatches and the rates of return
to the different educational component among the stud- ies. The incidence of overeducation varies from 10 to
42, while it seems that the estimated rate of return to a year of overeducation can either be positive or negative
depending on the study used. Similar conclusions can be drawn for the incidence of, and the returns to undereduc-
ation.
3. The results of the meta-analysis
