Most prior research addressing the topic of educational mismatch focuses on university graduates, while the analysis of microdata on doctorate holders has received relatively little attention in the literature. Using Korean survey of Careers and Mobility of Doctorate Holders (KCDH), this paper attempts to examine the incidence and wage effects of over-education among the most highly educated workers (i.e., doctorate holders) in the Korean labor market. Overall, the major findings of this study confirm the findings of existing studies. The analysis reveals a worrisome situation in which a non-negligible proportion of doctorate holders face over-education associated with a significant wage penalty. Approximately 44% of doctorate holders in our sample survey consider themselves as being over-educated. The significant wage penalty (approximately 6.5 percent) exists for over-educated workers compared with their adequately-matched counterparts. From theoretical perspectives on labor market mismatch, our results confirm the validity of the assignment theory, which asserts that the returns to additional investment in human capital appear to depend in part on the quality of the assignment of heterogeneous workers to heterogeneous jobs, and thus returns to investment in education are limited by how well jobs exploit workers’ education.
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