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Education-occupation mismatch: Is there an income penalty?

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Abstract
This paper adds to the small literature on the consequences of education-occupation mismatches. It examines the income penalty for field of education – occupation mismatches for men and women with higher education in Sweden and reveals that the penalty for such mismatches is large for both men and women. In fact, it is substantially larger than has been found for the US. Controlling for cognitive ability further establishes that the income penalty is not caused by a sorting by ability, at least for Swedish men. The income penalty for men decreases with work experience which is an indication that education-specific skills and work experience are substitutes to some extent. There is no evidence, though, that the mismatched individuals move to a matching occupation over time. Thus, for some, the income penalty seems to be permanent.

Suggested Citation

  • Nordin, Martin & Persson, Inga & Rooth, Dan-Olof, 2009. "Education-occupation mismatch: Is there an income penalty?," Working Papers 2009:1, Lund University, Department of Economics.
    • Handle: RePEc:hhs:lunewp:2009_001
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Human capital; rate of return; salary wage differentials; educational economics;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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