February 2018

IZA DP No. 11325: Overeducation Wage Penalty among Ph.D. Holders: An Unconditional Quantile Regression Analysis on Italian Data

The wage effect of job-education vertical mismatch (i.e. overeducation) has only recently been investigated in the case of Ph.D. holders. The existing contributions rely on OLS estimates that allow measuring the average effect of being mismatched at the mean of the conditional wages distribution. This paper, instead, observes the heterogeneity of the overeducation penalty along the wage distribution and according to Ph.D. holders' study field and sector of employment (academic/non-academic). We implement a Recentered Influence Function (RIF) to estimate an hourly wage equation and compare PhD holders who are over-educated with those who are not. The results reveal that overeducation hits the wages of those Ph.D. holders who are employed in the academic sector and in non-R&D jobs outside of the academic sector. Instead, no penalty exists among those who carry out R&D outside the Academia. The size of the penalty is higher among those who are in the mid-top of the wage distribution and hold a Social Science and Humanities specialization.