Persistence of Overeducation Among Young Workers and Business Cycle

Abstract

The objective of the article is to analyse the degree of persistence of overeducation in the initial stages of the professional career of young workers and the relationship between both the incidence and the persistence of overeducation and the business cycle. We use longitudinal data from administrative records (the ‘Continuous Sample of Working Life’) on the work trajectories of young Spaniards (16–35 years old) who enter the labour market for the first time at various moments in time (2005, 2009 or 2014) and estimate univariate and recursive bivariate probit models. The main findings are that nearly one third of entrants are overeducated in their first job, that their permanence in overeducation five years later is high (above 50%) and that the persistence of overeducation of young entrants is countercyclical.