The impact of Over-education and Under-education on Earnings: Egypt in a Post Revolutionary Era
(2014) EKHM52 20141Department of Economic History
- Abstract
- Previous research has mainly addressed the impact of over/under-education
on wages in developed countries. Therefore, this paper attempts to fill the void gap in the literature by empirically examining the impact of over-education and under-education on wages in a developing country, namely Egypt, using the 2012 Egyptian Labor Market Panel Survey (ELMPS). In order to do so, actual years of educations are divided into
years of required-education, over-education, and under-education using the realized matches
approach. Two modified specifications of the semi-logarithmic Mincer equation are used to
estimate the returns: the ORU specification proposed by Duncan and Hoffman (1981) and the dummy variables specification proposed by Verdugo &... (More) - Previous research has mainly addressed the impact of over/under-education
on wages in developed countries. Therefore, this paper attempts to fill the void gap in the literature by empirically examining the impact of over-education and under-education on wages in a developing country, namely Egypt, using the 2012 Egyptian Labor Market Panel Survey (ELMPS). In order to do so, actual years of educations are divided into
years of required-education, over-education, and under-education using the realized matches
approach. Two modified specifications of the semi-logarithmic Mincer equation are used to
estimate the returns: the ORU specification proposed by Duncan and Hoffman (1981) and the dummy variables specification proposed by Verdugo & Verdugo (1989). We contribute to the literature by employing an instrumental variable approach in order to account for the endogeneity of the three components of education. Our results indicate that using the conventional OLS method leads to an under-estimation of the returns to over-education
because of ability bias. It is found that returns to over-education are positive and in fact they are higher than returns to adequate education, which contradicts previous literature findings. It is also found that there is a trade-off between over-education and years of experience. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/4466868
- author
- Bedir, Nada LU
- supervisor
- organization
- course
- EKHM52 20141
- year
- 2014
- type
- H2 - Master's Degree (Two Years)
- subject
- keywords
- education-occupation mismatch, over-education, under-education, instrumental variables, Father’s education, Egypt
- language
- English
- id
- 4466868
- date added to LUP
- 2014-06-16 11:23:02
- date last changed
- 2014-06-16 11:23:02
@misc{4466868, abstract = {{Previous research has mainly addressed the impact of over/under-education on wages in developed countries. Therefore, this paper attempts to fill the void gap in the literature by empirically examining the impact of over-education and under-education on wages in a developing country, namely Egypt, using the 2012 Egyptian Labor Market Panel Survey (ELMPS). In order to do so, actual years of educations are divided into years of required-education, over-education, and under-education using the realized matches approach. Two modified specifications of the semi-logarithmic Mincer equation are used to estimate the returns: the ORU specification proposed by Duncan and Hoffman (1981) and the dummy variables specification proposed by Verdugo & Verdugo (1989). We contribute to the literature by employing an instrumental variable approach in order to account for the endogeneity of the three components of education. Our results indicate that using the conventional OLS method leads to an under-estimation of the returns to over-education because of ability bias. It is found that returns to over-education are positive and in fact they are higher than returns to adequate education, which contradicts previous literature findings. It is also found that there is a trade-off between over-education and years of experience.}}, author = {{Bedir, Nada}}, language = {{eng}}, note = {{Student Paper}}, title = {{The impact of Over-education and Under-education on Earnings: Egypt in a Post Revolutionary Era}}, year = {{2014}}, }