Overeducation and undereducation: Evidence for Portugal

Using a unique data set of Portuguese workers, we attempt to contribute additional empirical evidence to the debate on whether or not a discrepancy exists between the educational attainment of workers and the skill requirements of jobs, with the related impact on earnings functions and the returns to education. It appears that earnings are not uniquely determined on the basis of the educational attainment of workers. The placement of the worker in a particular job plays a role in wage determination. Hence, estimates of the impact of education on earnings using the standardized human capital earnings model may give misleading results, as estimates of the return to additional education beyond that required to perform the job may be lower than those associated with required education. (C) 1997 Elsevier Science Ltd.