Over-education and Mismatch between Occupation and Major Subject among University and College Graduates

01/01/2020 |  Zussman Noam, Lipiner Idan, Rosenfeld Dror
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Welfare Policy and Labor Market
Abstract

This paper examines the probability of higher-education graduates in Israel to be employed in situations of over-education and mismatch between their occupation and the subject in which they majored, based on types of institutions and subjects of study. We used data on all bachelor’s degree graduates born between 1978 and 1985, which include a range of economic, social, and demographic background characteristics in 2008, their Bagrut matriculation exam results, the academic fields they studied, their occupations, and wage levels. Three common approaches to measuring over-education were adopted—empirical, objective, and subjective (the latter two are based on 2014 PIAAC survey), as well as objective and subjective measures of mismatch (based on social surveys).

Bachelor’s degree graduates of public colleges have the greatest probability of being overeducated and mismatched in the first years after graduation, followed by university graduates (3–6 percentage points less) and private colleges (8–9 percentage points less than graduates of public colleges). Highly skilled workers, graduates of subjects with strong labor market affiliation, public sector employees, and those with experience in the labor market, have a lower probability of being overeducated and mismatched than others.

Over-education is correlated with a gross annual wage that is approximately 17 percent less than that of workers whose level of schooling is in line with their occupation, with no gender differences. Mismatch according to the objective/subjective measure is correlated with a wage lower by 5-6 percent/22 percent among both women and men. The negative correlation between over-education and wage is weaker among graduates of private colleges and other universities (those not defined as Elite Universities).