Can over-education account for the positive association between education and within-groups wage inequality? A note

International evidence shows that returns to education are increasing when moving up along the wage distribution. While researchers have focused on the inequality implications of this finding, little attention has been paid to its causes. This paper asks whether the over-education phenomenon is responsible for the observed pattern. To that purpose, recent data from the European Community Household Panel and several measures of over-education based on the worker’s self-assessment are used. The results show that over-education is not a convincing explanation.