Overeducation and earnings: a structural approach to differential attainment in the US labor force (1970-1982)

This paper examines the hypothesis that "overeducated' workers receive lower earnings returns to a year of educational attainment than those who are not mismatched. Data from the Current Population Survey reveal that those who are mismatched actually receive higher overall earnings as well as higher absolute returns to a year of college. A structural model of earnings determination shows that the primary impact of advanced education among occupationally mismatched workers is through the attainment of jobs which offer higher pay. Among workers not mismatched, the main influence of schooling is direct rather than through job characteristics. However, the analysis also suggests the difference between mismatched and non-mismatched workers narrowed between 1972 and 1982. -Author