Overeducation-the situation in which an individual has more schooling than is needed to do one's job-has been researched extensively for nearly three decades, but some major issues in regard to it are still topics of ongoing debate. By using a panel data, that combines a survey of two cohorts of...

Workers wrongly anchor their beliefs about outside options on their current wage. In particular, low-paid workers underestimate wages elsewhere. We document this anchoring bias by eliciting workers' beliefs in a representative survey in Germany and comparing them to measures of actual outside...