Chinese Journal of Sociology ›› 2016, Vol. 36 ›› Issue (3): 64-85.

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Education-Job Mismatches and Earnings among Chinese College Graduates

LI Jun   

  1. Institute of Sociology, Shanghai Academy of Social Sciences
  • Online:2016-05-20 Published:2016-05-20
  • Supported by:

    The research was sponsored by Shanghai Shuguang Program. Data analyzed in this paper were from Beijing College Students Panel Survey(BCSPS) conducted by National Survey Research Center (NSRC) at Renmin University of China. The data collection of BCSPS in 2009 and 2010 was also supported by HKUST Research Project Competition (RPC07/08.HS02),General Research Fund of Hong Kong Research Grants Council (644510),and Scientific Research Fund of Renmin University of China(2009030080,20100030415).

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Abstract:

The Chinese higher education expansion since 1999 has stimulated a number of empirical studies on the impact of education-job mismatches on college graduates' income,especially among the overqualified. This paper aims to overcome the two limitations in the existing literature that often neglect the possibility of self-chosen over-education as well as the specific labor market for university graduates. Propensity Score Matching (PSM) is applied to analyze the data from the Beijing College Students Panel Survey,namely,the methods of greedy matching,optimal pair matching and optimal full matching,as well as the three predicting equations of propensity score. The analysis indicates a wage penalty associated with over-education that is consistent with the findings in other societies. The self-chosen over-education does not alter the pattern. The overeducated workers in this study earn 21% less than those whose education matches their job requirement. After controlling demographic characteristics and labor market factors in multivariate OLS regression analysis,the difference is down to 15%. The PSM estimates vary from 9% to 18%,depending on the different application of PSM methods and the specification of predicting equations of propensity score. Evidences in this study support the assignment theory,rather than the neo-classical human capital theory,implying that underutilization of education imposes a "productivity ceiling" or a limitation to the utilization of human capital. Furthermore,the study also finds a higher risk of over-education mismatches among graduates who come from less advantaged family background with less prestigious degrees and fewer human capital.

Key words: educational mismatch, over-education, self-selection, propensity score matching