Competencies, firms and qualification mismatch. Returns to education and their limits

Título: Competencies, firms and qualification mismatch.Returns to education and their limits

Autora: María Ramos Martín

Director: Carlos García Serrano

Codirectora: Leire Salazar Vélez

Universidad: Universidad de Alcalá de Henares

Fecha de lectura: 07/04/2016

Calificación: Sobresaliente Cum Laude


There is an agreement in the literature on the positive effects of education in labour market outcomes. On average, more educated individuals have indeed better employment and earnings prospects. However, there may be some limits to the usually expected positive returns to education. The aim of this thesis is precisely to explore some of these limits.

From the supply side, competencies are considered in first place. The aim is to determine to what extend formal education enhances the cognitive skills that are valued at work. Results reveal that tertiary education does enhance competencies, and this positive effect is greater for those individuals with less likelihood to access that educational level.

From the demand side, firms play a prominent role --although sometimes left aside-- in wage determination. It is shown that the returns to observable skills, such as qualifications, are higher in larger firms, that large firms pay better partly due to the fact that they hire workers with higher competencies, and that the value attached to education is not always positive at the firm level.

Finally, the lack of adjustment of the demand and the supply side (qualification mismatch) is addressed in the final chapter. Specifically, it considers the question of whether overeducation is temporal or permanent among new entrants in the labour market. The evidence, focused on the Spanish graduates, suggest that the persistence of overeducation in working lives is very high for many workers, and may be rather permanent for a substantial part of them. Besides, episodes in overeducation do not act as stepping-stones to access into a more adequate job, but rather they impede the achievement of good job matches.

Most of the analysis are conducted for a set of developed countries, while the last chapter is restricted to the case study of Spain. Throughout the chapters the best available data are used in order to give response to every research question.

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