Overeducation of Young Workers in Spain: How Much Does the First Job Matter?

What is it about?

This article contributes to recent overeducation literature on the impact of an initial education mismatch on workers’ future careers. Specifically, we quantify the differences in the probability of overeducation depending on the quality of individuals’ first match. To do this, we apply an extension of the recursive bivariate probit model, which allows potential endogeneity problems to be taken into account, as well as a dissimilar impact of the initial match for workers with different educational attainment. The results indicate that overeducation is a trap, since young workers who were mismatched in their first job are 40.2 percentage points more likely to be overeducated in a later one than those who were not. When decomposing this difference in two parts, one related to the pure effect of the initial mismatch and another one related to workers’ characteristics, we conclude that the pure effect is more important, and it depends on educational attainment.

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Why is it important?

When analyzing the results, some suggestions can be made in order to improve educational match. First, it seems appropriate to suggest a reflection on some aspects of the Spanish education system. It is characterized by providing quite a generalist training, even at the university level. Moreover, the relation between tertiary education and labour market is very weak. Consequently, the policy of tertiary education expansion should be reviewed and perhaps re-oriented to develop better alternative vocational programmes, which have been not well considered in Spain traditionally. Moreover, we think apprenticeships would increase young people chances of obtaining work-based training. At the university level, from our point of view, it is necessary to modify curricula to upgrade skills that students acquire, taking into account employers’ opinion about young workers’ skills shortages. Moreover, it would be interesting to create partnerships between schools and firms, which are not common in Spain. It is also necessary to extend the ‘‘practicum credits’’ in university degrees, especially in the more general fields, as Bologna reforms attempt to. Furthermore, designing new degrees which provide students with qualifications required by new employment needs is also important. In addition to changes in the education system, we propose offering continuous student-guidance, especially at secondary education, which provides wider information on labour market prospects associated with different educational programmes. Further, initiatives dealing with career advisors are also recommended. It is also crucial to continue promoting a positive image and encouraging studies of sciences, technology, engineering and mathematics (STEM), as the European Union recommends. These fields of study show a higher demand in the workplace and the higher innovation process arising from them can contribute to economic development. Finally, a deep reflection should also be made regarding employment policies. Thus, an important issue is not only to provide measures directed at facilitating young workers access to employment, but also that these jobs are adequate, especially for highly educated workers. In this sense, encouraging employers to hire young skilled workers through job subsidies and internships could be useful.