Overeducation, Wages and Promotions within the Firm
Sandra Groeneveld, Joop Hartog
published in: Labour Economics, 2004, 11 (6), 701-714
We analyse data from personnel records of a large firm producing energy and
telecommunication and test for the effect of deviations between required and attained
education of workers. Required education is measured as hiring standards set by the firm.
We find the usual effects of over- and undereducation in a wage regression, thus rejecting
the argument that such effects are exclusively due to firm fixed effects. Distinguishing, within
the firm, between a sheltered internal labour market and an exposed external labour market,
we find that at the internal labour market over- and undereducation significantly affect career
development, in particular at younger ages, but that such effects are mostly absent at the
firmís external labour market.
Text: See Discussion Paper No. 883