Do Employers Prefer Overqualified Graduates? A Field Experiment

Abstract

We test whether employers prefer overqualified to adequately qualified job candidates. To this end, duos of fictitious applications by bachelor and master graduates are sent to real job openings with a bachelor's degree as a minimum requirement. For the overall sample, we find that overqualified master graduates are 19% more likely to be directly invited for a job interview and 11% more likely to get any positive reaction. This relative advantage for overqualified workers is found to be higher for bottleneck occupations. Relative preferences also differ across employers within labour market segments.

Work Hard or Play Hard? Degree Class, Student Leadership and Employment Opportunities*

“…First, in terms of job interview rate with a high degree class or extra‐curricular activities, the premium is substantially smaller than the premium of a master's degree (vs. a bachelor's degree) for graduates applying for a vacancy at the bachelor's level, as found in a smaller correspondence experiment in Flanders in 2014–2015 (i.e. about 3.3 percentage points; Verhaest et al ., 2018). Second, the premium from a high degree class or extra‐curricular activities is lower than the premium in terms of job interview rate found for recent graduates over candidates with an unemployment duration of 1 year after the graduation of 3.4 percentage points by Baert and Verhaest (2019).…”

“…In the beginning, correspondence experiments were exclusively applied to the investigation of hiring discrimination on grounds based on which unequal treatment is forbidden, such as ethnic or gender discrimination (Bertrand and Mullainathan, 2004; Oreopoulos, 2011; Baert et al ., 2015). More recently, however, scholars have employed this kind of experiment to study the causal impact on employment opportunities of other CV characteristics, including educational credentials and labour market‐related activities (Kroft, Lange and Notowidigdo, 2013; Eriksson and Rooth, 2014; Darolia et al ., 2015; Deming et al ., 2016; Nunley et al ., 2016; Verhaest et al ., 2018). From a methodological viewpoint, our study is close to the latter set of studies.…”

Dynamics of overqualification: evidence from the early career of graduates

“…Moreover, hiring overqualified applicants may be a form of insurance strategy to ensure a steady supply of high-skilled labour (Cedefop 2012). In line with studies showing positive effects on firm productivity (Mahy, Rycx, and Vermeylen 2015), employers might have an incentive to hire and retain overqualified employees (Büchel 2002;Verhaest et al 2018). Allowing for skill-heterogeneity among workers and jobs, the assignment theory assumes that the phenomenon of overqualification will be an inevitable outcome of a complex allocation process (Sattinger 1993).…”

Education, Income, and Inequality in the European Union

“…While the former rejected its validity, the latter did find some evidence that higher commuting distances strongly reduce the probability of being overqualified and that individuals living in rural areas run a higher risk of being overeducated. 25 See, e.g., Verhaest et al (2018). 26 See, e.g., Blundell et al (2016) who consider decentralized decision-making as a skills-biased innovation.…”