Overeducation wage penalty among Ph.D. holders: an unconditional quantile regression analysis on Italian data

Abstract

PurposeThe 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 ordinary least squares (OLS) estimates that allow measuring the average effect of being mismatched at the mean of the conditional wage distribution.Design/methodology/approachThe authors implement a recentered influence function (RIF) to estimate the overeducation gap along the entire hourly wage distribution and compare Ph.D. holders who are overeducated with those who are not on a specific sample of Ph.D. holders in different fields of study and European Research Council (ERC) categories. Moreover, the authors compare the overeducation gap between graduates working in the academic and non-academic sector.FindingsThe results reveal that overeducation hits the wages of those Ph.D. holders who are employed in the academic sector and in non-research and development (R&D) jobs outside of the academic sector, while no penalty exists among those who carry out R&D activities 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.Practical implicationsTwo policies could reduce the probability of overeducation: (a) a reallocation of Ph.D. grants from low to high demand fields of study and (b) the diffusion of industrial over academic Ph.Ds.Originality/valueThis paper 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).