Skills and low pay: upgrading or overeducation?

In most industrialised countries, one may observe the tendency for higher educated people to be employed in jobs that used to be occupied by lower skilled people. Although this tendency appears to be a rather general phenomenon, economic literature provides no clear clue about the causes of this stylized fact. Explanations vary from the pessimistic view in which the value of diploma''s decreases over time and further investments in education are wasted money, to the view that knowledge becomes the crucial production factor, which is required in more and more occupations.