Conference Paper
The Incidence and Wage Penalty of Overeducation: The Case of Egypt
No.
ERF30_24
Publisher
ERF
Date
March, 2024
The phenomenon of overeducation is becoming increasingly common across many countries. In this research study, the main objective is to examine factors that determine overeducation, the impact of overeducation on wages, and the earning differences between genders in the case of Egypt. We use a cross-sectional micro-level dataset taken from the Egyptian Labor Force Survey (LFS) conducted by the Economic Research Forum (ERF). We employ a probit model to capture factors determining overeducation. The empirical results reveal that different sociodemographic, economic sector, and job-related factors determine overeducation. Moreover, we apply different matching techniques, radius matching, nearest-neighbor matching, and a weighting method, inverse probability weighting (IPW) to estimate the causal impact of overeducation on wage earnings. The result shows that overeducation affects the hourly wage earnings negatively. For further investigation, we estimate our regression by gender. The coefficients are negative for both genders, with a higher magnitude among females, revealing that overeducated females face higher wage penalties than overeducated males. The paper provides policy recommendations for both the Egyptian educational system and the job market to mitigate overeducation in the country.
Research Fellows
Ali Fakih
Professor of Economics, Department of Economics, Lebanese...
Authors
Zeina Lizzaik
Ph.D. Candidate in Economics, Concordia University