Why the youth are so eager for university education? Evidence from Iran’s labor market
Purpose The purpose of this paper is to estimate the wage difference between overeducated and adequately educated workers in a sample of semi-skilled and low-skill occupations in Iran’s labor market. The objective is to see if overeducated employees in these occupations enjoy higher wages in compari...
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| Veröffentlicht in: | Journal of economic studies (Bradford) 2017-01, Vol.44 (3), p.362-379 |
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| creator | K. Haddad, GholamReza Habibi, Nader |
| description | Purpose
The purpose of this paper is to estimate the wage difference between overeducated and adequately educated workers in a sample of semi-skilled and low-skill occupations in Iran’s labor market. The objective is to see if overeducated employees in these occupations enjoy higher wages in comparison to their adequately educated co-workers.
Design/methodology/approach
The authors use the propensity score matching (PSM) model to estimate the wage difference between overeducated and adequately educated workers in a sample of semi-skilled and low-skill occupations in Iran’s labor market. The PSM method allows the authors to prevent selection bias by comparing each group of overeducated workers with a matched group of adequately educated workers with similar socio-economic characteristics.
Findings
The results show that in Iran’s labor market, the overeducated workers enjoy a wage premium in the range of 10-25 percent for their excess education when they have to work in semi- or low-skill occupations. While this relative advantage has gradually declined for private sector employees over the period 2001-2013, it has remained stable for public sector jobs. The result is attributable to the fact that salary and benefits for public sector employees are directly linked to education attainment and their work experience. The findings show that the relative wage advantage of overeducation is larger for the younger employees with ten or fewer years of experience who have more education than older workers. Overall these findings offer an explanation for the strong desire of Iranian youth for university education. If a university graduate finds a job that matches her/his specialization she/he will enjoy a higher salary than a high school graduate. If she/he has to accept a semi-skilled or low-skill job for which she/he is overeducated, she/he still enjoys a wage premium over her/his co-workers who are not overeducated.
Originality/value
The analysis makes three unique contributions: first, the authors use a unique and detailed micro-data for an economy (Iran) in which the public sector dominates the private sector. The authors investigate the hypothesis for private and public sectors separately. Second, the authors divide the sample of workers into market newcomers and experienced workers. The authors analyze the impact of overeducations on each group separately. Third, the authors use the treatment effect of being overeducated on the individual’s monthly wage by the P |
| doi_str_mv | 10.1108/JES-02-2016-0036 |
| format | Article |
| fullrecord | <record><control><sourceid>proquest_emera</sourceid><recordid>TN_cdi_emerald_primary_10_1108_JES-02-2016-0036</recordid><sourceformat>XML</sourceformat><sourcesystem>PC</sourcesystem><sourcerecordid>1920232061</sourcerecordid><originalsourceid>FETCH-LOGICAL-c344t-72ff328d5b3425ff1c8b4d48e93699b02b6f5caf894924d6ddfd1c0ef323a5893</originalsourceid><addsrcrecordid>eNptkL1OwzAUhS0EEqWwM1piNr3-S50JoapAUSUGQLBZTmzTlDYudlIpG6_B6_EkpCoLEtNZznfv0YfQOYVLSkGN7qePBBhhQDMCwLMDNKBjqciYq_EhGgAVgnCp5DE6SWkJAJIDG6DXl0WHm4XDXWibBTbR4RSwM28uYh8ibutq62Kqmg4725amqUJ9hafbyrq6dNjHsMazaOrvz6-EV6bokbWJ7645RUferJI7-80her6ZPk3uyPzhdja5npOSC9GQMfOeM2VlwQWT3tNSFcIK5XKe5XkBrMi8LI1XuciZsJm13tISXA9xI1XOh-hif3cTw0frUqOXoY11_1LTnAHjDDLat2DfKmNIKTqvN7Hqh3aagt75070_DUzv_Omdvx4Z7RG3dtGs7H_EH-P8B5rscdw</addsrcrecordid><sourcetype>Aggregation Database</sourcetype><iscdi>true</iscdi><recordtype>article</recordtype><pqid>1920232061</pqid></control><display><type>article</type><title>Why the youth are so eager for university education? Evidence from Iran’s labor market</title><source>Emerald Journals</source><creator>K. Haddad, GholamReza ; Habibi, Nader</creator><creatorcontrib>K. Haddad, GholamReza ; Habibi, Nader</creatorcontrib><description>Purpose
The purpose of this paper is to estimate the wage difference between overeducated and adequately educated workers in a sample of semi-skilled and low-skill occupations in Iran’s labor market. The objective is to see if overeducated employees in these occupations enjoy higher wages in comparison to their adequately educated co-workers.
Design/methodology/approach
The authors use the propensity score matching (PSM) model to estimate the wage difference between overeducated and adequately educated workers in a sample of semi-skilled and low-skill occupations in Iran’s labor market. The PSM method allows the authors to prevent selection bias by comparing each group of overeducated workers with a matched group of adequately educated workers with similar socio-economic characteristics.
Findings
The results show that in Iran’s labor market, the overeducated workers enjoy a wage premium in the range of 10-25 percent for their excess education when they have to work in semi- or low-skill occupations. While this relative advantage has gradually declined for private sector employees over the period 2001-2013, it has remained stable for public sector jobs. The result is attributable to the fact that salary and benefits for public sector employees are directly linked to education attainment and their work experience. The findings show that the relative wage advantage of overeducation is larger for the younger employees with ten or fewer years of experience who have more education than older workers. Overall these findings offer an explanation for the strong desire of Iranian youth for university education. If a university graduate finds a job that matches her/his specialization she/he will enjoy a higher salary than a high school graduate. If she/he has to accept a semi-skilled or low-skill job for which she/he is overeducated, she/he still enjoys a wage premium over her/his co-workers who are not overeducated.
Originality/value
The analysis makes three unique contributions: first, the authors use a unique and detailed micro-data for an economy (Iran) in which the public sector dominates the private sector. The authors investigate the hypothesis for private and public sectors separately. Second, the authors divide the sample of workers into market newcomers and experienced workers. The authors analyze the impact of overeducations on each group separately. Third, the authors use the treatment effect of being overeducated on the individual’s monthly wage by the PSM. The advantage of the PSM method is that it eliminates the selection bias in the wage effect of overeducation, whereas the traditional regression-based techniques may result in this type of bias.</description><identifier>ISSN: 0144-3585</identifier><identifier>EISSN: 1758-7387</identifier><identifier>DOI: 10.1108/JES-02-2016-0036</identifier><language>eng</language><publisher>Glasgow: Emerald Publishing Limited</publisher><subject>Academic degrees ; Advantages ; Bias ; Careers ; Colleagues ; College graduates ; Colleges & universities ; Developing countries ; Earnings ; Economic analysis ; Economic conditions ; Economic models ; Economics ; Education ; Educational attainment ; Employees ; Employment ; Enrollments ; Higher education ; Labor force ; Labor law ; Labor market ; LDCs ; Newcomers ; Occupations ; Older people ; Overeducation ; Overqualification ; Private sector ; Profitability ; Propensity ; Public sector ; Secondary schools ; Selection bias ; Skills ; Socioeconomic factors ; Specialization ; Unemployment ; University graduates ; Wages & salaries ; Work experience ; Workers</subject><ispartof>Journal of economic studies (Bradford), 2017-01, Vol.44 (3), p.362-379</ispartof><rights>Emerald Publishing Limited</rights><rights>Emerald Publishing Limited 2017</rights><lds50>peer_reviewed</lds50><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c344t-72ff328d5b3425ff1c8b4d48e93699b02b6f5caf894924d6ddfd1c0ef323a5893</citedby><cites>FETCH-LOGICAL-c344t-72ff328d5b3425ff1c8b4d48e93699b02b6f5caf894924d6ddfd1c0ef323a5893</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktohtml>$$Uhttps://www.emerald.com/insight/content/doi/10.1108/JES-02-2016-0036/full/html$$EHTML$$P50$$Gemerald$$H</linktohtml><link.rule.ids>314,780,784,967,11634,27923,27924,52688</link.rule.ids></links><search><creatorcontrib>K. Haddad, GholamReza</creatorcontrib><creatorcontrib>Habibi, Nader</creatorcontrib><title>Why the youth are so eager for university education? Evidence from Iran’s labor market</title><title>Journal of economic studies (Bradford)</title><description>Purpose
The purpose of this paper is to estimate the wage difference between overeducated and adequately educated workers in a sample of semi-skilled and low-skill occupations in Iran’s labor market. The objective is to see if overeducated employees in these occupations enjoy higher wages in comparison to their adequately educated co-workers.
Design/methodology/approach
The authors use the propensity score matching (PSM) model to estimate the wage difference between overeducated and adequately educated workers in a sample of semi-skilled and low-skill occupations in Iran’s labor market. The PSM method allows the authors to prevent selection bias by comparing each group of overeducated workers with a matched group of adequately educated workers with similar socio-economic characteristics.
Findings
The results show that in Iran’s labor market, the overeducated workers enjoy a wage premium in the range of 10-25 percent for their excess education when they have to work in semi- or low-skill occupations. While this relative advantage has gradually declined for private sector employees over the period 2001-2013, it has remained stable for public sector jobs. The result is attributable to the fact that salary and benefits for public sector employees are directly linked to education attainment and their work experience. The findings show that the relative wage advantage of overeducation is larger for the younger employees with ten or fewer years of experience who have more education than older workers. Overall these findings offer an explanation for the strong desire of Iranian youth for university education. If a university graduate finds a job that matches her/his specialization she/he will enjoy a higher salary than a high school graduate. If she/he has to accept a semi-skilled or low-skill job for which she/he is overeducated, she/he still enjoys a wage premium over her/his co-workers who are not overeducated.
Originality/value
The analysis makes three unique contributions: first, the authors use a unique and detailed micro-data for an economy (Iran) in which the public sector dominates the private sector. The authors investigate the hypothesis for private and public sectors separately. Second, the authors divide the sample of workers into market newcomers and experienced workers. The authors analyze the impact of overeducations on each group separately. Third, the authors use the treatment effect of being overeducated on the individual’s monthly wage by the PSM. The advantage of the PSM method is that it eliminates the selection bias in the wage effect of overeducation, whereas the traditional regression-based techniques may result in this type of bias.</description><subject>Academic degrees</subject><subject>Advantages</subject><subject>Bias</subject><subject>Careers</subject><subject>Colleagues</subject><subject>College graduates</subject><subject>Colleges & universities</subject><subject>Developing countries</subject><subject>Earnings</subject><subject>Economic analysis</subject><subject>Economic conditions</subject><subject>Economic models</subject><subject>Economics</subject><subject>Education</subject><subject>Educational attainment</subject><subject>Employees</subject><subject>Employment</subject><subject>Enrollments</subject><subject>Higher education</subject><subject>Labor force</subject><subject>Labor law</subject><subject>Labor market</subject><subject>LDCs</subject><subject>Newcomers</subject><subject>Occupations</subject><subject>Older people</subject><subject>Overeducation</subject><subject>Overqualification</subject><subject>Private sector</subject><subject>Profitability</subject><subject>Propensity</subject><subject>Public sector</subject><subject>Secondary schools</subject><subject>Selection bias</subject><subject>Skills</subject><subject>Socioeconomic factors</subject><subject>Specialization</subject><subject>Unemployment</subject><subject>University graduates</subject><subject>Wages & salaries</subject><subject>Work experience</subject><subject>Workers</subject><issn>0144-3585</issn><issn>1758-7387</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2017</creationdate><recordtype>article</recordtype><sourceid>AFKRA</sourceid><sourceid>BENPR</sourceid><sourceid>CCPQU</sourceid><sourceid>DWQXO</sourceid><recordid>eNptkL1OwzAUhS0EEqWwM1piNr3-S50JoapAUSUGQLBZTmzTlDYudlIpG6_B6_EkpCoLEtNZznfv0YfQOYVLSkGN7qePBBhhQDMCwLMDNKBjqciYq_EhGgAVgnCp5DE6SWkJAJIDG6DXl0WHm4XDXWibBTbR4RSwM28uYh8ibutq62Kqmg4725amqUJ9hafbyrq6dNjHsMazaOrvz6-EV6bokbWJ7645RUferJI7-80her6ZPk3uyPzhdja5npOSC9GQMfOeM2VlwQWT3tNSFcIK5XKe5XkBrMi8LI1XuciZsJm13tISXA9xI1XOh-hif3cTw0frUqOXoY11_1LTnAHjDDLat2DfKmNIKTqvN7Hqh3aagt75070_DUzv_Omdvx4Z7RG3dtGs7H_EH-P8B5rscdw</recordid><startdate>20170101</startdate><enddate>20170101</enddate><creator>K. Haddad, GholamReza</creator><creator>Habibi, Nader</creator><general>Emerald Publishing Limited</general><general>Emerald Group Publishing Limited</general><scope>AAYXX</scope><scope>CITATION</scope><scope>0U~</scope><scope>1-H</scope><scope>7WY</scope><scope>7WZ</scope><scope>7XB</scope><scope>8AO</scope><scope>8BJ</scope><scope>8FI</scope><scope>AFKRA</scope><scope>BENPR</scope><scope>BEZIV</scope><scope>CCPQU</scope><scope>DWQXO</scope><scope>FQK</scope><scope>FYUFA</scope><scope>F~G</scope><scope>JBE</scope><scope>K6~</scope><scope>K8~</scope><scope>L.-</scope><scope>L.0</scope><scope>M0C</scope><scope>M0T</scope><scope>PQBIZ</scope><scope>PQEST</scope><scope>PQQKQ</scope><scope>PQUKI</scope><scope>Q9U</scope></search><sort><creationdate>20170101</creationdate><title>Why the youth are so eager for university education? Evidence from Iran’s labor market</title><author>K. Haddad, GholamReza ; Habibi, Nader</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c344t-72ff328d5b3425ff1c8b4d48e93699b02b6f5caf894924d6ddfd1c0ef323a5893</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2017</creationdate><topic>Academic degrees</topic><topic>Advantages</topic><topic>Bias</topic><topic>Careers</topic><topic>Colleagues</topic><topic>College graduates</topic><topic>Colleges & universities</topic><topic>Developing countries</topic><topic>Earnings</topic><topic>Economic analysis</topic><topic>Economic conditions</topic><topic>Economic models</topic><topic>Economics</topic><topic>Education</topic><topic>Educational attainment</topic><topic>Employees</topic><topic>Employment</topic><topic>Enrollments</topic><topic>Higher education</topic><topic>Labor force</topic><topic>Labor law</topic><topic>Labor market</topic><topic>LDCs</topic><topic>Newcomers</topic><topic>Occupations</topic><topic>Older people</topic><topic>Overeducation</topic><topic>Overqualification</topic><topic>Private sector</topic><topic>Profitability</topic><topic>Propensity</topic><topic>Public sector</topic><topic>Secondary schools</topic><topic>Selection bias</topic><topic>Skills</topic><topic>Socioeconomic factors</topic><topic>Specialization</topic><topic>Unemployment</topic><topic>University graduates</topic><topic>Wages & salaries</topic><topic>Work experience</topic><topic>Workers</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>K. Haddad, GholamReza</creatorcontrib><creatorcontrib>Habibi, Nader</creatorcontrib><collection>CrossRef</collection><collection>Global News & ABI/Inform Professional</collection><collection>Trade PRO</collection><collection>ABI/INFORM Collection</collection><collection>ABI/INFORM Global (PDF only)</collection><collection>ProQuest Central (purchase pre-March 2016)</collection><collection>ProQuest Pharma Collection</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>Hospital Premium Collection</collection><collection>ProQuest Central UK/Ireland</collection><collection>ProQuest Central</collection><collection>Business Premium Collection</collection><collection>ProQuest One Community College</collection><collection>ProQuest Central Korea</collection><collection>International Bibliography of the Social Sciences</collection><collection>Health Research Premium Collection</collection><collection>ABI/INFORM Global (Corporate)</collection><collection>International Bibliography of the Social Sciences</collection><collection>ProQuest Business Collection</collection><collection>DELNET Management Collection</collection><collection>ABI/INFORM Professional Advanced</collection><collection>ABI/INFORM Professional Standard</collection><collection>ABI/INFORM Global</collection><collection>Healthcare Administration Database</collection><collection>ProQuest One Business</collection><collection>ProQuest One Academic Eastern Edition (DO NOT USE)</collection><collection>ProQuest One Academic</collection><collection>ProQuest One Academic UKI Edition</collection><collection>ProQuest Central Basic</collection><jtitle>Journal of economic studies (Bradford)</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>K. Haddad, GholamReza</au><au>Habibi, Nader</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Why the youth are so eager for university education? Evidence from Iran’s labor market</atitle><jtitle>Journal of economic studies (Bradford)</jtitle><date>2017-01-01</date><risdate>2017</risdate><volume>44</volume><issue>3</issue><spage>362</spage><epage>379</epage><pages>362-379</pages><issn>0144-3585</issn><eissn>1758-7387</eissn><abstract>Purpose
The purpose of this paper is to estimate the wage difference between overeducated and adequately educated workers in a sample of semi-skilled and low-skill occupations in Iran’s labor market. The objective is to see if overeducated employees in these occupations enjoy higher wages in comparison to their adequately educated co-workers.
Design/methodology/approach
The authors use the propensity score matching (PSM) model to estimate the wage difference between overeducated and adequately educated workers in a sample of semi-skilled and low-skill occupations in Iran’s labor market. The PSM method allows the authors to prevent selection bias by comparing each group of overeducated workers with a matched group of adequately educated workers with similar socio-economic characteristics.
Findings
The results show that in Iran’s labor market, the overeducated workers enjoy a wage premium in the range of 10-25 percent for their excess education when they have to work in semi- or low-skill occupations. While this relative advantage has gradually declined for private sector employees over the period 2001-2013, it has remained stable for public sector jobs. The result is attributable to the fact that salary and benefits for public sector employees are directly linked to education attainment and their work experience. The findings show that the relative wage advantage of overeducation is larger for the younger employees with ten or fewer years of experience who have more education than older workers. Overall these findings offer an explanation for the strong desire of Iranian youth for university education. If a university graduate finds a job that matches her/his specialization she/he will enjoy a higher salary than a high school graduate. If she/he has to accept a semi-skilled or low-skill job for which she/he is overeducated, she/he still enjoys a wage premium over her/his co-workers who are not overeducated.
Originality/value
The analysis makes three unique contributions: first, the authors use a unique and detailed micro-data for an economy (Iran) in which the public sector dominates the private sector. The authors investigate the hypothesis for private and public sectors separately. Second, the authors divide the sample of workers into market newcomers and experienced workers. The authors analyze the impact of overeducations on each group separately. Third, the authors use the treatment effect of being overeducated on the individual’s monthly wage by the PSM. The advantage of the PSM method is that it eliminates the selection bias in the wage effect of overeducation, whereas the traditional regression-based techniques may result in this type of bias.</abstract><cop>Glasgow</cop><pub>Emerald Publishing Limited</pub><doi>10.1108/JES-02-2016-0036</doi><tpages>18</tpages></addata></record> |
| fulltext | fulltext |
| identifier | ISSN: 0144-3585 |
| ispartof | Journal of economic studies (Bradford), 2017-01, Vol.44 (3), p.362-379 |
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| language | eng |
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| source | Emerald Journals |
| subjects | Academic degrees Advantages Bias Careers Colleagues College graduates Colleges & universities Developing countries Earnings Economic analysis Economic conditions Economic models Economics Education Educational attainment Employees Employment Enrollments Higher education Labor force Labor law Labor market LDCs Newcomers Occupations Older people Overeducation Overqualification Private sector Profitability Propensity Public sector Secondary schools Selection bias Skills Socioeconomic factors Specialization Unemployment University graduates Wages & salaries Work experience Workers |
| title | Why the youth are so eager for university education? Evidence from Iran’s labor market |
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