ABSTRACT

With the continuous expansion of college enrollment, the supply of highly educated talents exceeds the demand in the labor market, and the phenomenon of education mismatch is widespread. Using data from China Family Panel Studies from 2014 to 2018, this paper measures the income-reward and punishment effects of education mismatch based on fixed-effects model and instrumental variable estimation. It shows that overeducated workers will suffer a 4.6% earnings penalty for each year of overeducation, but still earn 11.4% more than well-matched workers for the same position.