A new GLO Discussion Paper shows that overeducation associates with a higher likelihood of sorting into performance pay jobs.
GLO Discussion Paper No. 1327, 2023
Overeducation, Performance Pay and Wages: Evidence from Germany – Download PDF
by Baktash, Mehrzad B.
GLO Affiliate Mehrzad B. Baktash
Author Abstract: Overeducated workers are more productive and have higher wages in comparison to their adequately educated coworkers in the same jobs. However, they face a series of challenges in the labor market, including lower wages in comparison to their similarly educated peers who are in correctly matched jobs. Yet, less consensus exists over the adjustment mechanisms to overcome the negative consequences of overeducation. This study examines the hypotheses that overeducated workers sort into performance pay jobs as an adjustment mechanism and that performance pay moderates their wages. Using German Socio-Economic Panel, I show that overeducation associates with a higher likelihood of sorting into performance pay jobs and that performance pay moderates the wages of overeducated workers positively. It also holds in endogenous switching regressions accounting for the potential endogeneity of performance pay. Importantly, the positive role of performance pay is particularly larger for the wages of overeducated women.
Featured image: Jason-Leung-on-unsplash
Journal of Population Economics (JOPE)
JOPE (2022): CiteScore 9.2 (LINK) & Impact Factor 6.1; 524 K Downloads
JUST PUBLISHED
ONLINE FIRST: 32 articles forthcoming in Volume 36, Issue 4, 2023. Covered issues: Historical demography; fertility and marriage; migration and refugee issues; health, vaccinations, risky behaviors; education; retirement; gender issues and preferences
CALL FOR PAPERS
JOPE invites paper submissions for the following collections:
– Abortions
– Covid-19 and diseases
– Lifecycle fertility models
– Sexual and domestic violence
– Sexuality including LGBT issues
– Statistics & measurement of population economics
For more details and for examples of already published papers in these collections see:
https://glabor.org/collections-journal-of-population-economics-invites-paper-submissions-in-six-research-areas/
https://link.springer.com/journal/148/collections
JOPE Collections are a set of published papers on issues of significant relevance for the journal. Authors are continuously invited to submit their related work for evaluation stating their specific interest to contribute in the submission cover letter. JOPE Editors will treat those submissions with particular interest and speedy handling. Articles will be immediately published after final acceptance.
GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS, EconPapers). Complete list of all GLO DPs – downloadable for free.
The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.
Ends;