Crowding out or “one-size-fits-all” occupations? A regional exploration of youth overeducation in Spain

Little attention has been paid to supply- and demand-side factors explaining regional variation in youth overeducation. These factors might be drivers of a crowding out effect, where workers at a given level of education are expelled from their “matched” labour market positions by workers with a higher level of educational attainment. Controlling for interregional migration, we explore this scenario applying time-series cross-sectional analysis to data from the Spanish Labour Force Survey (1987–2016). Our results show that both supply- and demand-side factors contribute to explaining regional differences and that an increase in the overeducation rate among young people with tertiary education displaces those with only upper secondary education towards overeducation, but not unemployment.