A panel data analysis of the incidence and impact of over-education

Abstract

This paper adds to the overeducation literature using panel data from the British Household Panel Survey. Much has been written about who is more likely to be overeducated, and the impact of being overeducated on wages, at particular points in time using cross-sectional data. Panel data allows us to control for unobserved individual heterogeneity in the determinants of incidence and impact of overeducation. The paper goes on to estimate the determinants of transitions out of overeducation, providing new information about its duration, and the factors that influence being in, and escaping from, this state.