Overeducation in the Irish labour market

This chapter provides the first rigorous analysis of overeducation in Ireland, a topic of particular relevance for higher education policy, since potential drivers include an imbalance between the supply of higher education graduates and the number of available jobs. It finds that 15% of Irish employees are classified as being overeducated in terms of what is required ‘to get’ their current job, with 21% overeducated in terms of requirements ‘to do’ their job. The pay penalty associated with being overeducated to get the job ranges from 14 to 27% depending on the model specification adopted. A decomposition analysis demonstrates that Irish overeducated workers’ pay tends to be lower as a consequence of low job-skill requirements and/or acting on poor-quality information prior to accepting their current job.