The Effects of Macroeconomic Conditions at Graduation on Overeducation

18 Pages Posted: 30 May 2017

See all articles by Fraser Summerfield

Fraser Summerfield

University of Aberdeen - Economics; CELMR; Rimini Center for Economic Analysis (RCEA)

Ioannis Theodossiou

University of Aberdeen - Business School

Date Written: July 2017

Abstract

This article shows that unfavorable economic conditions at graduation decrease the likelihood of a good job‐worker match over a worker's subsequent career. Mismatch is quantified in terms of overeducation by both industry and occupation. The German Socio‐Economic Panel and region‐level unemployment rates from 1994 to 2012 are used. Instrumental variables estimates account for endogenous graduation timing. A single percentage point increase in regional unemployment causes an increase in the probability of overeducation of 1.6–1.7 percentage points for university graduates. Effects for technical tertiary education and apprenticeship graduates are smaller. Labor market entry conditions affect workers for up to 9 years after graduation.

JEL Classification: J23, J22, E32, I23

Suggested Citation

Summerfield, Fraser and Theodossiou, Ioannis, The Effects of Macroeconomic Conditions at Graduation on Overeducation (July 2017). Economic Inquiry, Vol. 55, Issue 3, pp. 1370-1387, 2017, Available at SSRN: https://ssrn.com/abstract=2976596 or http://dx.doi.org/10.1111/ecin.12446

Fraser Summerfield (Contact Author)

University of Aberdeen - Economics ( email )

Aberdeen
United Kingdom

CELMR ( email )

Aberdeen, 01224 2720
United Kingdom

Rimini Center for Economic Analysis (RCEA) ( email )

Via Patara, 3
Rimini (RN), RN 47900
Italy

Ioannis Theodossiou

University of Aberdeen - Business School ( email )

Edward Wright Building
Dunbar Street
Aberdeen, Scotland AB24 3QY
United Kingdom

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