Attained vs.effective schooling: Assessing educational mismatch using PIAAC data

This article proposes a measure of educational mismatch based on a novel definition of schooling that takes into account the different levels of skills acquired by individuals with the same education. It is assumed that less (more) able individuals could compensate for their skill deficit (surplus) with more (less) education, and PIAAC data are used to analyse the substitution between skill and educational mismatches in terms of wages. We use the proposed measure to assess the level of effective educational mismatch in a set of countries. When accounting for workers’ real skills, we find that overeducation tends to drop, the difference between observed and effective educational mismatch varying by country.