The Impact of Surplus Schooling on Earnings: Some Additional Findings II

This paper proposes a new statistical measure of the overeducation phenomenon. From Stochastic Production Frontiers (SPF), we use e¢ ciency score between schooling and earning to assess worker mismatches. Based on the French case, our measure reveals an overestimation of the overeducation extent, in comparison to the traditional measures.Following our econometric model, SPF approaches provide better estimation results on probit and earning function. Moreover, our approach shows that traditional measures overestimate also the wage penalties of overeducation. Thus, we point out that previous studies overestimate the dimishing returns of education and they have, conversely, understated the role of human capital.