Educational Mismatch among Ph.D.s: Determinants and Consequences

1
Educational Mismatch among Ph.D.s Determinants
and Consequences

• Keith A. Bender and John S. Heywood
• Department of Economics and Graduate Program in
  Human
• Resources and Labor Relations, UW-Milwaukee
• Presentation to SEWP Conference
• 19 October, 2005

2
Motivation

• What is an educational mismatch?
• Why should it matter?
• Worker costs
• Employer costs
• Social costs
• Why scientists with PhDs?
• Homogeneity of sample
• Key for innovation and RD
• Concern that trained scientists are leaving
  science (Preston 2004)

3
Some Literature

• How many are mismatched?
• Approximately 40 in national samples
• Why does mismatch persist in equilibrium?
• Govt subsidization causes an oversupply of the
  highly educated (Groot and Maassen van den Brink
  2000a)
• Educational signals imperfectly correlated with
  worker productivity, which is difficult/costly to
  detect (Tsang and Levin 1985)
• Internal Labor Markets force maintenance of pay
  hierarchies (Thurow 1975)

4
Literature Continued

• How is educational mismatch measured?
• External job analysis
• Worker perceptions of requirements
• Effects on earnings?
• Falls by approx 14 (Groot and Maassen van den
  Brink 2000b Borgans et al. 2000 Allen and van
  der Velden 2001)
• Effects on job satisfaction?
• No (Buchel 2002) or slightly negative effect
  (Solomon et al. 1981, Allen and van der Velden
  2001 Moshavi and Terborg 2002)
• Effects on turnover?
• Generally increased (Solomon et al. 1981 Allen
  and van der Velden 2001)

5
Data and Methods

• 1997 Survey of Doctorate Recipients
• Primary Measure of Mismatch
• Thinking about the relationship between your work
  and your education, to what extent is your work
  related to your doctoral degree?
• Closely related (69.3)
• Somewhat related (23.4)
• Not at all related (7.3)

6
Data and Methods cond

• Outcome Measures
• Annual Earnings
• Job Satisfaction (four point scale)
• Job Change
• Other variables
• Sector, Demographic, Job characteristics, Current
  Discipline

7
Table 2 Educational Mismatch, Earnings, Job
Satisfaction and Turnover
8
Consequences of Mismatch

• Log Earnings Regressions

• Job Satisfaction

9
Consequences cond

• Changing Jobs

10
Consequences cond

• Influence of Age
• Possible that since accumulation of and return to
  human capital takes time, consequences may grow
  over time
• Age-Earnings profiles by Mismatch
• Age-Satisfaction profiles by Mismatch

11
Age-Earnings Profiles

• At age 28 4.5 and 8.6 decrease
• At age 62 Over 10 decrease

• At age 28 under 2 decrease
• At age 62 12.1 and 20.9 percentage point
  decrease

12
Age-Satisfaction Profiles

• At age 28 6.7 and 17.5 percentage point
  decrease
• At age 62 13.3 and 27.2 percentage point
  decrease

• At age 28 11.4 and 16.9 percentage point
  decrease
• At age 62 15.3 and 19.9 percentage point
  decrease

13
Reasons for Mismatch

• People who report their job not being closely
  related to their education are asked why.

14
Effects of Reasons
15
Determinants of Mismatch
16
Conclusions

• Educational Mismatch occurs in the highly
  educated sector approx 30, but more in the
  nonacademic sector, 43
• Mismatch results in adverse outcomes
• 6-12 lower earnings
• 10-18 reduction in probability of being
  satisfied in job
• 4-7 more likely to change jobs
• Who are the mismatched?
• Nonacademics, older workers, those not doing
  teaching or research, hard scientists
• No appreciable difference between genders or races