TITLE:
Overeducation of University Graduates: A Voluntary and Rational Choice of Individuals—The Case of Three Greek Universities
AUTHORS:
Αnastasia Pseiridis, Theodore P. Lianos, George Agiomirgianakis
KEYWORDS:
Overeducation, Psychic Benefits from Education, Voluntary Choice, Consumption of Education, Career Mobility Theory, Human Capital Theory, Theory of Differential Overqualification
JOURNAL NAME:
Theoretical Economics Letters,
Vol.8 No.11,
August
6,
2018
ABSTRACT: Overeducation of university graduates is considered
by many theories as a market phenomenon resulting from market imbalances,
market imperfections, and/or job mobility restrictions. Thus, overeducated
individuals are often considered as “victims” of labor market misfunctioning, as they are not responsible
for the appearance of their overeducation. On the other hand, empirical
evidence suggests that overeducation 1) affects various sectors
of an economy, 2) is
rather large, i.e. in EU-28 it is around 30%
and 3) is
persistent over time in many countries. In our paper, we take a different
approach by considering overeducation as a voluntary rational choice taken by
individuals when they decide their educational plans. We thus treat education not only as
an investment in human capital, but also as a consumption good offering certain
nonmonetary (psychic and social) benefits to university graduates. This
approach suggests that overeducation may not be a temporary phenomenon and it
will be higher than anticipated when considering education only as investment.
Our data set is drawn from a small open economy, Greece, and it is based on graduates of
three universities.