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Author: Ma, Jie
Resulting in 1 citation.
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Ma, Jie |
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Within-Occupation Schooling Dispersion, Over-education and Mismatch in the Labor Market: Theory and Empirics Presented: Atlanta GA, American Economic Association Annual Meeting, January 2019 Cohort(s): NLSY79 Publisher: American Economic Association Keyword(s): Overeducation Permission to reprint the abstract has not been received from the publisher. Concerns persist for years about whether individuals acquire more education than is required for their work, a phenomenon known as 'overeducation'. Ever since Duncan and Hoffman's seminal work (1981), much of the previous literature documents mixed evidence and interprets it as evidence for inefficiency and misallocation. To reconcile the contrasting facts, this paper first builds a vertical schooling and occupation sorting model based on a single dimensional human capital index, where education substitutes for ability. Both education and occupation choices are efficient in the theoretical model. I then use simulated data from the calibrated model to show that it reproduces patterns of estimates found in the literature. These estimates are in fact fully consistent with efficient decision making. Finally, I add lifecycle, information frictions and symmetric employer learning to the static model to derive novel and testable implications about the dynamics of education-job match. The paper then turns to the NLSY79 data to demonstrate that empirical evidence in the US from 1982-1994 is consistent with the theoretical model's predictions. Both the theoretical model predictions and the new empirical evidence rationalize the observed overeducation without implications of misallocation. |
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Bibliography Citation
Ma, Jie. "Within-Occupation Schooling Dispersion, Over-education and Mismatch in the Labor Market: Theory and Empirics." Presented: Atlanta GA, American Economic Association Annual Meeting, January 2019. |