The mismatch of over-education and earnings in Spain: how big are differences?

ABSTRACT

This paper attempts to examine the incidence of over-education in Spain and to analyse the role over-education plays on an individual’s income distinguishing by gender. Following Freeman’s perspective, we can confirm over-education is due to an oversupply of qualified labour. We study over-education applying different matching techniques based on propensity score methods with microdata drawn from the European Statistics on Income and Living Conditions (EU-SILC, 2009–2019). Our results show that the incidence of over-education has increased over time and there exist huge differences by gender. Findings also demonstrate that over-education presents a negative effect on income. In fact, the real annual average earnings from over-educated women (men) can be approximately 7,000 (5,000) euros less than the average earnings of women (men) who were not over-educated. Policy implications are discussed in the light of the empirical results of our analysis.

KEYWORDS:

• Over-education
• income
• matching techniques
• EU-SILC
• Spain

JEL CLASSIFICATION:

• I24
• J31

Acknowledgments

The authors would like to thank the University of Cantabria and the Parliament of Cantabria for their Postdoctoral Assistance Program in Areas of Social and Legal Sciences.

Availability of data and material

Available upon request from the corresponding author.

Code availability

Available upon request from the corresponding author.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This research received no external funding.