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THE WAGE EFFECTS OF OVER-EDUCATION AMONG YOUNG STEM GRADUATES

KIHONG PARK

Department of Economics, Korea Army Academy at Yeong-cheon (KAAY), South Korea

E-mail Address: kma3316@gmail.com

Corresponding author.

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and

DOOSEOK JANG

School of Humanities & Social Sciences, Korea Advanced Institute of Science Technology (KAIST), South Korea

E-mail Address: jangds@kaist.ac.kr

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https://doi.org/10.1142/S0217590817500059Cited by:4 (Source: Crossref)

Abstract

Using data from the 2010 Graduates Occupational Mobility Survey, this paper examines the wage effects of over-education (OE) among graduates in science, technology, engineering, and mathematics (STEM) disciplines at the early stage of their careers. In the pooled OLS analysis, the negative correlation between OE and wages remains even if we were to estimate an augmented specification where OE is disaggregated according to perceived skill mismatch. However, the pooled OLS estimates are changed dramatically when we control for unobserved individual heterogeneity (i.e., ability) using the panel FE estimation procedure; namely, reduced coefficients in the wage equation compared to pooled OLS estimation.

Keywords:

JEL: J24, J31

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