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Journal of Education and Work Vol. 21, No. 3, July 2008, 249–271
Graduates in economics and educational mismatch: the case study of the University of Naples ‘Parthenope’1 Claudio Quintano, Rosalia Castellano and Antonella D’Agostino* Department of Statistics and Mathematics, University of Naples ‘Parthenope’, Naples, Italy (Received April 2007; final version received February 2008) Taylor and Francis Ltd CJEW_A_321578.sgm
Journal 10.1080/13639080802214118 1363-9080 Original Taylor 302008 21
[email protected] AntonellaD’Agostino 000002008 & ofArticle Francis Education (print)/1469-9435 and Work (online)
The quality of jobs of economics graduates was studied in terms of educational mismatch. The returns of over-education on earnings and on the job-search were also investigated. The discussion regards the second wave of a longitudinal survey of a random sample of economics graduates from the University of Naples ‘Parthenope’, a major school of economics in southern Italy. Over-education was measured using two different indicators of educational mismatch, one based on an objective parameter and the other on the same parameter combined with a subjective one. A probit regression with selection was carried out to analyse the influence of a set of control variables (such as family, background, employment geography and characteristics of job, work history, gender and channels used to enter the labour market) on over-education. The same variables were used to study the returns of over-education on earnings and on the jobsearch. The probability of being over-educated was significantly affected by gender, attainments in Higher Education (HE), channels used to enter the labour market, job location and job sector applied for. Females, lower HE achievers and graduates working in trade/sales or information systems sectors were more likely to be over-educated than other subjects, whereas use of further education to enter the labour market decreased the probability of being over-educated. Over-educated workers were found to have a high probability of low earnings. Over-education and low earnings induced workers to change jobs. Keywords: educational mismatch; over-education; human capital; selection bias
Introduction Much literature exists on problem of the educational mismatch, i.e. the lack of coherence between required and offered educational level for a given job, as its social and economic implications can be very heavy (e.g. Clifford and Shockey 1984; Alba-Ramirez 1993; Manacorda and Petrongolo 1999; Allen and van der Velden 2001; Chevalier 2003; Veieira 2005). Many studies highlight that over-educated workers have lower returns for their qualifications (Cohn 1992; Alba-Ramirez and San Segundo 1995; Groot 1996). Moreover, the incidence of the educational mismatch is one of the elements used to estimate the effectiveness of qualifications and is therefore a useful indicator for employment active policy in the educational system. The problem of the educational mismatch also acquires more importance if the study population is composed of graduates. Indeed, a remarkable social development in all Western countries in the last few decades has been the increase in educational level of the population *Corresponding author. Email:
[email protected] ISSN 1363-9080 print/ISSN 1469-9435 online © 2008 Taylor & Francis DOI: 10.1080/13639080802214118 http://www.informaworld.com
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(Groot and van den Drink 2000). While high qualifications improve the prospect of educational match, the longer duration of education increases expectations which are not always satisfied by the opportunities offered by the labour market. Dolton and Vignoles (1997, 2000) studied the incidence and effects of over-education in the European and UK graduate labour markets, respectively; Battu, Belfield, and Sloane (1999) reported a cohort study of over-education among graduates; Rubb (2003) discussed post-college overeducation in the USA. Unfortunately, empirical evidence shows that the problem of educational mismatch worsened among Italian graduates in the second half of the 1990s (ISTAT 1997, 2003). The issue should therefore be studied in depth in order to measure its incidence and to discover its strongest predictors among individual and background factors. Recently, Di Pietro and Cutillo (2006) and Di Pietro and Urwin (2006) studied over-education among Italian graduates. This is particularly important for graduates in economics, since this university degree is considered ‘strong’ because it offers a wide choice of employment alternatives and has high external effectiveness. Students expect high returns in terms of employment and educational match. Unfortunately a quick overview of the literature on educational mismatch and overeducation shows that there is no uniform definition of over-education (Halaby 1994; Dolton and Vignoles 2000; Hartog 2000). In these studies it is also argued that none of the usual definitions are universally preferred over the others, as each has its advantages and drawbacks and in many cases the definition used depends on the available data. This paper deals with the problem of educational mismatch and contributes to the recent literature. We first propose an index of over-education based self-reported measures, using the approach of Ungaro and Verzicco (2005). We then discuss how this new measure can influence empirical results, providing an interesting comparison with the traditional indicator of over-education. Empirical analysis aims to identify the main factors affecting educational mismatch, studying the effects of over-education on earnings and on job-search. We adopt the methodological approach used in related works by Allen and van der Velden (2001) and Di Pietro and Urwin (2006). The main difference in our approach regards the definition of the over-education index, the covariates included in model specification and analysis in a particular context, as graduates in economics in an area of southern Italy with severe structural problems of the labour market. This is followed by an overview of the Italian graduate labour market (section ‘Overview of the labour market for Italian graduates’), data used for the empirical analysis (section ‘Data’) and methodology and variables used in probit regression analysis (section ‘Definition of variables and methodology’). Section ‘Empirical results’ discusses the empirical results of factors affecting educational mismatch and the effects of over-education on earnings and the job-search respectively. The final discussion and conclusion are presented in section ‘Final discussion and conclusion’. Overview of the labour market for Italian graduates In recent years, the Italian labour market has been characterised by a continuous process of transformation. Transitions that covered decades until the end of the 1980s may now develop in a few years and call for a different method of analysis and policies (Reyneri 2002). In this market jobs with open-ended contracts have progressively lost their central importance, and jobs having greater flexibility and instability have multiplied (Trivellato and Contini 2006). In its 2006 Annual Report, the Italian Statistical Office (ISTAT 2006)
