Delayed graduation and overeducation: A test of the human capital model versus the screening hypothesis

Arbeitspapier

The academic circles are devoting a growing interest to delayed graduation and overeducation, but none has analyzed the joint consequences of these two phenomena. Thus, this paper studies the link between graduation not within the minimum period and overeducation, and the effects of these variables on wages, using the ISFOL-Plus data. According to the human capital model, delayed graduation increases a student' human capital and should, therefore, reduce her probability of being overeducated, while increasing her wage. According to the screening hypothesis, instead, delayed graduation signals low skills and therefore increases the chances of being overeducated, while bearing a wage penalty. The evidence lines towards predictions based on the screening hypothesis. First, delayed graduation increases the chances of overeducation. In addition, the direct wage penalty associated to delayed graduation equals 7% of the median wage. However, being a determinant of overeducation, it also indirectly contributes to the penalty of 19.8% of the median wage associated to overeducation. These effects are sizeable, considering the very low returns to higher education in Italy reported in previous studies.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 6413

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities ; Single Equation Models: Single Variables: Instrumental Variables (IV) Estimation ; Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models ; Fertility; Family Planning; Child Care; Children; Youth ; Human Capital; Skills; Occupational Choice; Labor Productivity
• Subject: university-to-work transition ; delayed graduation ; overeducation ; human capital theory ; screening hypothesis ; earnings equations ; Italy ; Akademiker ; Berufseinstieg ; Unterbeschäftigung ; Bildungsabschluss ; Dauer ; Signalling ; Schätzung ; Italien

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Aina, Carmen ; Pastore, Francesco
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/58987
• URN: urn:nbn:de:101:1-201206147274
• Last update: 10.03.2025, 11:44 AM CET