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Overeducation, Wages and Promotions within the Firm

Author

Listed:
  • Groeneveld, Sandra

    (Erasmus University Rotterdam)

  • Hartog, Joop

    (University of Amsterdam)

Abstract
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 firm’s external labour market.

Suggested Citation

  • Groeneveld, Sandra & Hartog, Joop, 2003. "Overeducation, Wages and Promotions within the Firm," IZA Discussion Papers 883, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp883
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    References listed on IDEAS

    as
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    14. repec:bla:kyklos:v:41:y:1988:i:1:p:113-41 is not listed on IDEAS
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    More about this item

    Keywords

    career mobility; wages; overeducation; education; promotions;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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