Overeducated Graduates in the Canadian Labour Market

Abstract

The study investigates the influence of overeducation on annual earnings among recent Canadian post-secondary graduates. Using data from the National Graduate Survey – class of 2000, 2005, and 2009/2010, I find that overeducation is negatively associated with annual earnings. It is economically important and not sensitive to the choice of controls (gender, educational attainment, working experience, region, and occupational choice). Interestingly, the negative correlation between overeducation and earnings is even larger after the financial crisis in 2008. I also discover that through comparing those who have graduated for 5 years to those for 2 years, the penalty, though still significant, is reduced by half. Furthermore, this paper shows that males have more dominant earnings advantages over females’, top education as well as professional experience also boost earnings considerably.