Overeducation,Undereducation and Earnings: Further Evidence on the Importance of Ability and Measurement Error Bias

It is generally found that overeducated (undereducated) workers earn less (more) than adequately educated workers with similar years of education. We investigate the importance of ability and measurement error bias for these outcomes by applying a fixed-effects instrumental variable approach on data for Flemish young workers. This approach results in substantially higher overeducation penalties and undereducation bonusses than a standard random effects approach. This suggests that the upward bias resulting from unobserved worker heterogeneity is more than compensated by the negative bias resulting from measurement error. Further, we also find some evidence on heterogeneous effects of mismatches accross job levels and years of experience.     

The Kuznets curve of human capital inequality: 1870–2010

This paper describes the long-term global trends in education inequality since 1870. Inequality in years of schooling is shown to have mechanically decreased along with the decline in the share of illiterate people. In search of a monetary equivalent of years of schooling, we turn to Mincer (1974) human capital ineq uality. Within countries, we find evidence of an inverted U-shape curve for human capital inequality over time, namely a Kuznets curve for human capital. At the global level, the world inequality in human capital has followed a similar trajectory, first increasing from 1870 to 1970, then decreasing.     

A Panel Study of Immigrants’ Overeducation and Earnings in Australia

The recent literature on overeducation has provided divergent results on whether or not overeducation bears an earnings penalty. In addition, few studies have considered overeducation among immigrants. This article uses panel data analyses to investigate the match between education and occupation and resulting earnings effects for immigrants from English‐Speaking and Non‐English Speaking Backgrounds, relative to the native‐born population in Australia. Based on nine years of longitudinal data, the panel approach addresses individual heterogeneity effects (motivation, ability, and compensating differentials) that are crucial in overeducation analysis. First, we find that immigrants have significantly higher incidence rates of overeducation than the native‐born. This probability increases, rather than diminishes, once we control for unobserved correlated effects. Second, based on panel fixed effects analyses there is no penalty for overeducation for ESB immigrants. However, NESB immigrants receive a lower return to required and overeducation compared to the other groups after controlling for individual heterogeneity.     

Being “top-ranked” without “causing troubles”: Comparing federal and provincial immigration pathways for Chinese international students in Canada

Canada's immigration selection regime uses a combination of human capital measures and direct employer involvement to select economic immigrants, emphasizing pre-arranged employment as critical to secure permanent resident status. This trend affects international students in unique ways. We interviewed 17 Chinese women international students residing in Canada about their decision to study and desire to stay in Canada. Participants faced difficulties in accumulating adequate employment records for immigration applications and employer-driven immigration pathways put them at considerable risk of deskilling and exploitation. When comparing available immigration pathways, we found that participants had more success with provincial programmes than federal ones because of the availability of flexible pathways, greater options and lower requirements for eligibility. We conclude with three policy recommendations to highlight the importance of periodic revisions to selection criteria to balance human capital measures and employer reliance to retain talented foreign workers in Canada.     

Computer usage, destination language proficiency and the earnings of natives and immigrants

This paper uses the concept of a computer as a public good within the household to model the demand for computers at home. It also investigates the determinants, and consequences for earnings, of computer use. The equations are estimated using data on the native born and immigrants from the 2001 Census of Population and Housing in Australia. The multivariate analyses show that recent arrivals are more likely to use computers than the Australian born. The data suggests a high degree of favorable selection in migration as the level of computer use in Australia is much higher than in most of the countries that Australia’s immigrants come from. Those with a higher permanent income (education, household assets) are more likely to have a computer at home, but there is no effect of transitory income (unemployment). Immigrants who are more proficient in English are also more likely to use a computer. The relation between age and computer use is strongly influenced by cohort effects. Using a computer at home is associated with about 7% and 13% higher earnings for native-born and foreign-born men, respectively. For the immigrants, the effects of schooling and English language proficiency on earnings are greater among those who use a computer at home. This suggests complementarity in the labor market. The use of a computer is shown to be a way the foreign born can increase the international transferability of their pre-immigration skills, a finding that has implications for immigrant assimilation policies.

Racial wage differentials among young adults: Evidence from the 1990s

This study seeks to decompose wage differentials between black and white male young adults into those related to labor market discrimination and those resulting from human capital endowments. The importance of testing for significant differences in wage equations before conducting decomposition analysis is emphasized. Study results demonstrate that ignoring correction for the sample selection bias resulting from black-white differences in the probability of being employed would lead to an underestimation of the size of wage differentials. The study also shows that the results of models based on different assumptions regarding the nondiscriminatory wage structure might lead to different conclusions pertinent to the extent of labor market discrimination. Implications for public policy development are discussed. His current research interests include consumption economics, income distribution, and international comparative analyses of households' resources allocation. He received his Ph.D. from the University of Missouri at Columbia. Her current research interests include family financial distribution and wellbeing and individual and family resource management. She received her Ph.D. from Iowa State University.     

Spouse Overeducation and Family Migration: Evidence from the US

Scholars have noted that marriage frequently results in a sub-optimal job search. This literature suggests that the overeducation of wives is a result of household migration (tied-mover) or the result of an inability to migrate (tied-stayer). Others have found that overeducation may also be a cause of migration. This study examines overeducation as both a cause and effect of migration. Some evidence shows that families with an overeducated husband are found to be more likely to migrate. In turn, this migration leads to increased levels of overeducation among wives and decreased levels of overeducation among husbands. Household migration is also found to lower the full-time employment rates of wives by more than their male counterparts.     

NOTES ON MINCER'S LOG-EARNINGS MODEL

In his famous human capital model, Mincer provides assumptions under which a worker's annual log-earnings are a function of years of schooling and years of experience. The function has the important property, widely invoked in empirical studies, that its derivative with respect to schooling equals the rate of return to the schooling investment. It is shown here that some of Mincer's assumptions are not needed for the property to hold, but that other assumptions carry troublesome hidden implications.     

Age,Experience, and Schooling: Decomposing Earnings Inequality in the United States and Brazil*

This article analyzes age and experience profiles of earnings inequality for U.S. and Brazilian males. Decomposition of the inequality profiles using a standard human capital earnings equation clarifies the determinants of cross-sectional inequality profiles and demonstrates a number of important differences in the shape of the two countries' profiles and in their underlying components. Most dramatic are Brazil's higher returns to schooling and higher variance in years of schooling, both factors contributing to the significantly higher level of income inequality in Brazil. Changes in the distribution of schooling across cohorts are shown to play a central role in explaining cross-sectional inequality profiles within each country and differences in earnings inequality in the United States and Brazil.     

Aspects of occupational mobility and attainment among immigrants in Australia

The occupational distributions of the native-born and foreign-born in the Australian labor market differ greatly. The disparity between the occupational distributions is greatest among the middle age-bracket, and among immigrants from Eastern Europe and the Mediterranean region. Analysis of occupational attainment using unit record data from the 1981 Census shows that as duration of residence in Australia lengthens, the occupational distribution of the overseas-born converges toward that of the Australian-born. Moreover, birthplace groups differ in the degree of upward mobility associated with length of residence in Australia: immigrants from non-English-speaking countries tend to make greater occupational advances than their counterpart from English-speaking countries. This suggests a higher degree of international transferability of human capital skills among immigrants from English-speaking countries. The analysis also highlights the concentration of immigrants from non-English speaking countries in low-ranked occupations, and the relatively minor influence of education on the occupational attainment of immigrants from these birth place regions.     

The Impact of Migrant Remittances on School Attendance and Education Attainment: Evidence from Jordan

This paper evaluates the impact of migrant remittances on human capital accumulation among youth. An augmented human capital model with two outcomes, education attendance and education attainment, is estimated using a large nationally representative household survey from Jordan. Empirical results show that migrant remittance receipt has a positive effect on education attendance. This finding is obtained while controlling for other socio‐economic determinants of schooling behavior and is robust to censorship and endogeneity bias. The results also indicate that the magnitude of the remittance impact on both education outcomes is larger for men compared with that of women.     

IMMIGRATION,SKILL HETEROGENEITY,AND QUALIFICATION MISMATCH

We investigate the effects of U.S. immigration in a comprehensive search and matching framework that allows for skill heterogeneity, imperfect substitutability between skilled and unskilled inputs, different search cost between natives and immigrants, cross‐skill matching, and imperfect transferability of foreign human capital. When we simulate the effects of the U.S. immigration that took place between the years 2000 and 2009, we find that both skilled and unskilled natives, as well as skilled and unskilled immigrants, gain in terms of income and employment. We also investigate the effects of an improvement in the transferability of human capital across borders and find that, although it has some redistributive effects, overall it benefits both immigrants and natives. (JEL F22, J61, J64)     

CREDENTIALS AND CAPACITIES:

The "new structuralism" in stratification research has made important contributions to our understanding of job assignment by directing attention to the demand side of labor markets. This article builds on this work by conceptualizing job matching in terms of labor market transactions (hirings and promotions). Detailed quantitative and case study evidence is presented to ask how employers perceive the link between schooling and the acquisition of skills required for job performance. The results show that employers generally see a link between schooling and the acquisition of both general and specific skills, but rarely feel very strongly about this and are often willing to concede that skills might well have been acquired elsewhere. Managers hiring from the outside and managers assigning promotions differ in the information they glean from the educational credentials of job candidates. Little evidence is found that any one theory (human capital, screening, credentialism, or cultural capital) can account for the pattern of results.     

中国人力资本存量结构的估算：基于教育基尼系数法

通过对中国31个省区1998～2008教育基尼系数的测算,描述了中国历年人力资本存量结构及变化规律：人力资本基尼系数和人力资本平均存量水平具有很高的负相关性,各区域人均受教育年限不断提高,人力资本基尼系数逐渐下降,但人力资本不平等的现状在三大区域间依然突出。     

Education and health in late-life among high school graduates: Cognitive versus psychological aspects of human capital

Just as postsecondary schooling serves as a dividing line between the advantaged and disadvantaged on outcomes like income and marital status, it also serves as a dividing line between the healthy and unhealthy. Why are the better educated healthier? Human capital theory posits that education makes one healthier via cognitive (skill improvements) and noncognitive psychological resources (traits such as conscientiousness and a sense of mastery). I employ the Wisconsin Longitudinal Study (1957-2005) to test the relative strength of measures of cognitive human capital versus noncognitive psychological human capital in explaining the relationship between education and health outcomes among high school graduates. I find little evidence that noncognitive psychological human capital is a significant mediator, but find a relatively significant role for cognitive human capital, as measured by high school academic performance. It is not just higher educational attainment; academic performance is strongly linked to health in later life.     

Occupational Human Capital and Wages: The Role of Skills Transferability Across Occupations

This paper examines the effect of accumulated human capital, and particularly occupational human capital, on the workers’ wages. Unlike previous studies that apply occupational tenure as a proxy for occupational human capital, this paper applies the concept of Shaw’s (1984) occupational human capital to capture the transferability of occupational skills and estimates a new measure of occupational human capital, so-called occupational investment. Using the National Longitudinal Survey of Youth (NLSY) from 1979 to 2000, the key findings of this paper suggest that occupational skills from the previous jobs can also affect the workers’ wages at the current job and that occupational investment is one of the important sources of wages supporting the Shaw’s original work on wage determination. Specifically, 5 years of (3-digit) occupational investment relative to current occupational tenure could lead to a wage increase of 7.7 to 18.4 %. I also find that the general labor market experience accounts for a large share of workers’ wages.     

Migrant selectivity and returns to skills: the case of Taiwanese immigrants in the United States

"This article examines the selection of international migration from Taiwan to the United States in terms of the skills and abilities of emigrants. Micro data from Taiwan and the U.S. are used to test Borjas' self-selection model (1987).... Based on the assumption that emigrants choose to move to the destination that can maximize their expected lifetime earnings and provide higher returns to their human capital, Heckman (1979) developed a two-stage method that allows one to correct the problem of selectivity bias and to estimate directions of the selection on the basis of observed characteristics (the levels of skills or education) and unobserved characteristics (innate ability or motivation) for both emigrants and non-emigrants." (SUMMARY IN FRE AND SPA)     

The Case of Cubans: Racial Inequality in U.S. Homeownership and Home Values

Prior research finds that human capital may explain racial housing inequality, whereas others note the historical role that race played in creating unequal housing conditions. This study uses the case of Cubans in the United States to examine whether human capital explains Black–White housing inequalities, or if they are a result of nativity/cohort differences—a proxy for the federal policies that supported Cubans’ economic and social incorporation. Using pooled data from the American Community Survey, I examine how human capital characteristics and nativity/migration cohorts shape odds of homeownership and predicted home values among Cubans. Extended analyses using decomposition methods find that although human capital characteristics are important, they play a smaller role in explaining Black–White differences in homeownership and home values. Indicative of the changing structure of racial stratification in the United States, results reveal substantial inequality among the oldest of Cuban immigrants and U.S.‐born Cubans, despite a trend toward declining inequality among recent arrivals. Supported by the literature of systemic racism, the case of Cubans shows how human capital explanations do not sufficiently explain racial housing inequalities and how the future of racial stratification is one of inter‐ and intra‐ethnic group inequality.     

Cultural capital or relative risk aversion? Two mechanisms for educational inequality compared1

In this paper we empirically examined two explanatory mechanisms for educational inequality: cultural reproduction and relative risk aversion, using survey data taken from secondary school pupils in Amsterdam. Cultural reproduction theory seeks to explain class variations in schooling by cultural differences between social classes. Relative risk aversion theory argues that educational inequalities can be understood by between-class variation in the necessity of pursuing education at branching points in order to avoid downward mobility. We showed that class variations in early demonstrated ability are for a substantial part cultural: cultural capital - measured by parental involvement in highbrow culture - affected school performance at the primary and secondary level. However, relative risk aversion - operationalized by being concerned with downward mobility - strongly affects schooling ambitions, whereas cultural capital had no effect. Thus, we conclude that 'primary effects' of social origin on schooling outcomes are manifested through cultural capital and not through relative risk aversion (in addition to other potential sources of class variations such as genetics). Relative risk aversion, and not cultural capital, affects schooling ambitions, which is relevant for our understanding of secondary effects.     

Overeducation: Concept,theories, and empirical evidence

The educational expansion experienced in most advanced economies in the past few decades has triggered a thriving debate on overeducation. Research on overeducation has traditionally been addressed from an economic perspective, mainly focusing on wage returns to extra years of education. More recently, the sociological literature has contributed to overeducation research by identifying individual characteristics that help us to differentiate overeducated from non‐overeducated workers. Moreover, the sociological perspective has explored more in depth the role of educational and labour market institutions in assessing overeducation incidence and duration across countries. These contributions have eased the path to frame overeducation as a form of social stratification, rather than as an inefficient educational investment in economic terms. The present article reviews the economic literature on overeducation and incorporates the sociological perspective, understanding overeducation as a disadvantageous form of employment.