This article examines the reasons for the observed discrepancy between workers' actual and required levels of schooling and the resulting differences in returns to schooling, "Overeducated" workers are found to be younger and to have lower amounts of on-the-job training than workers with the required level of schooling. They also have higher rates of firm and occupational mobility, characterized by movement of higher-level occupations. The findings suggest that overeducation can be explained by the trade-off between schooling and other components of human capital and by the mobility patterns of overeducated workers.
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