Global Studies

In the absence of data measuring the number of years of schooling required to perform particular jobs, we propose a new approach to testing for overeducation. Overeducation is confirmed by rising education levels in menial jobs that offer very low returns to education. Overeducation is deemed a systemic problem if these jobs absorb a growing share of the educated labor force. Normatively, overeducation should sometimes be seen as a shortage of skilled jobs, not as a surplus of educated workers. We use a decomposition of the returns to education to clarify the distinction between equity and efficiency rationales for expanding access to education when returns to education are low. We find substantial evidence of overeducation in the Philippines, mild evidence of it in India, and none in Thailand.