The Incidence of and Returns to ‘Overeducation’: PIAAC Evidence on the G7

Abstract

PIAAC data are used to evaluate the extent of overeducation in G7 countries. Incidence of overeducation is seen to vary systematically with a number of demographic characteristics. The impact of overeducation on remuneration is then estimated using quantile regression. This impact is observed to be minor, suggesting that while some individuals have qualifications in excess of those required to undertake their job, their additional human capital is nonetheless rewarded. Care therefore needs to be taken in interpreting measures of overeducation.