Are Educational Mismatches Responsible for the ‘Inequality Increasing Effect’ of Education? |
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Authors: | Santiago Budría |
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Institution: | (1) Department of Economics, University of Madeira, Rua Penteada 9000-390, Funchal, Portugal;(2) CEEAplA, Ponta Delgada, Portugal |
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Abstract: | This paper asks whether educational mismatches can account for the positive association between education and wage inequality
found in the data. We use two different data sources, the European Community Household Panel and the Portuguese Labour Force
Survey, and consider several types of mismatch, including overqualification, underqualification and skills mismatch. We test
our hypothesis using two different measurement methods, the ‘statistical’ and the ‘subjective’ approach. The results are robust
to the different choices and unambiguously show that the positive effect of education on wage inequality is not due to the
prevalence of educational mismatches in the labour market. |
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Keywords: | |
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