1. Parental Over- and Undereducation and Offspring Earnings
- Author
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Dirk Witteveen
- Abstract
The ORU model has become one of the most accustomed ways to measure the joint impact of required level of education of the job and the education-occupation matching of the worker on their earnings. The broader implications of overeducation and undereducation for socio-economic stratification are however less straightforward. This study contributes to our understanding of the long-term and far-reaching consequences of education-occupation matching by estimating the ORU parameters of parents for the earnings levels of their offspring. After introduction of the “intergenerational ORU model,” we measure associations between parental ORU (overeducation, required education, and undereducation) and earnings among individuals during occupational maturity in the United States (using the NLSY79) and the United Kingdom (using the UKHLS). Results echo findings from the standard ORU model. Years of “matched education-occupation” (R) of the parents’ job increases offspring earnings by about 9.9% (US) and about 8.2% (UK), while years of parents’ “surplus occupation” (U) increases offspring earnings by about 4.0% (US) and about 3.7% (UK). We find a positive effect of “surplus education” (O) in the US, but not the UK. Similar to intergenerational mobility models, parental ORU estimates are moderated by offspring own education yet remain statistically significant. Further analyses explore gender differences in both generations. Implications for ORU research and intergenerational mobility research are discussed.
- Published
- 2022
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