Discussion
Bender/Heywood
Educational Mismatch among Ph.D.s
Shulamit Kahn
SEWP conference
October 18, 2005
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Kahn SEWP October 19
Questions I address
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Why might people have education/job
mismatches?
Is each theory of mismatches consistent with
these findings?
What are the efficiency implications?
What are the policy implications?
Kahn SEWP October 19
1. Technological change means that the
education is no longer useful
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Consistent with:
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Mismatched  lower wages
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Mismatched  lower satisfaction
Mismatched  later job change
What are efficiency implications? Policy implications?
 We lose the value of SET human capital, but that is
probably inevitable and desirable. Does not mean we
should educate less. Would argue against academic
tenure in science.
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Kahn SEWP October 19
2. SET education is subsidized or overencouraged. There aren’t enough jobs.
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Probably, the people who leave SET are those least
productive in SET or most productive elsewhere.
Consistent with:
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Mismatched  lower wages
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Mismatched  lower satisfaction
Mismatched  later job change
What are efficiency implications? Policy implications?
 We lose the cost of the education. We should stop
subsidizing SET education (as much).
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Kahn SEWP October 19
3. Education increases avg productivity
(in SET jobs). Post-education, there are
random realizations of job offers from
both in and outside of education field.
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Consistent with:
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Mismatched  lower wages
e.g. Wf = X + K + ei
Wm = X + ej Go to highest W K = 1
distribution: ed 0,1,2,3 avg: in field: 3 mismatched: 2.67
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Mismatched  lower satisfaction
Mismatched  later job change
What are efficiency implications? Policy implications?
 We lose the cost of the education. Great if it were possible to know
e’s beforehand (e.g. require job experience before Ph.D.) If not, no
policy change will help. (People wouldn’t get educated if it wasn’t a
better choice.)
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Kahn SEWP October 19
4. For some, education is a step to other
jobs not in the field.
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Consistent with:
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Mismatched  lower wages
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Mismatched  lower satisfaction
Mismatched  later job change
What are efficiency implications? Policy implications?
 There is no suggestion that society is educating too
much.
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 opposite?
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Kahn SEWP October 19
5. Any group has some losers who aren’t
good at anything. They will be more likely
not to get good jobs, including SET jobs.
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Consistent with:

Mismatched  lower wages
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Mismatched  lower satisfaction
Mismatched  later job change
What are efficiency implications? Policy implications?
 We lose the cost of the education. Ideally, the
educational system would be better at identifying losers.
Have potential employers involved in Ph.D. application
process? Require job experience before Ph.D.?
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Kahn SEWP October 19
6. Employers mistakenly do not believe
that the person can really do the SET job.
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Consistent with:
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Mismatched  lower wages
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Mismatched  lower satisfaction
Mismatched  later job change (for the better) 
What are efficiency implications? Policy implications?
 We lose the cost of the education. Requires employers
to change attitudes.
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Kahn SEWP October 19
With age, men (women) in mismatched job see wages
slow/fall more (less).
i.e. Size of wage mismatch penalty is larger (smaller) for
older men (women).
Men
Women
1. Technological change  education useless.
2. SET education is subsidized or overencouraged.
3. Random post-ed job offers within/outside field
(Mick Jagger).
4. Education a stepping stone (Rush Holt)
5. Losers can’t get an SET (or any good) job.
6. Employers misjudge person’s capabilities.
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More probably, wage profile is less concave in SET, especially
academic, jobs.
Could test by interacting age & academic?
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Kahn SEWP October 19
--
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--Women who leave for pay/promotion have more
$ (but not happier). Men: a bit (less sig) more $
1. Technological change  education useless.
2. SET education is subsidized or overencouraged.
3. Random post-ed job offers within/outside field
(Mick Jagger) .
4. Education a stepping stone (Rush Holt)
5. Losers can’t get an SET (or any good) job.
6. Employers misjudge person’s capabilities.
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Kahn SEWP October 19
Men
Women
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Mismatches due to “job not available in field”
have less $ and happiness.
1. Technological change  education useless.
2. SET education is subsidized or overencouraged.
3. Random post-ed job offers within/outside field
(Mick Jagger) .
4. Education a stepping stone (Rush Holt)
5. Losers can’t get an SET (or any good) job.
6. Employers misjudge person’s capabilities.
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Kahn SEWP October 19
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Mismatches due to changed interests, career: a
bit worse off in wage, not happier.
1. Technological change  education useless.
2. SET education is subsidized or overencouraged.
3. Random post-ed job offers within/outside field
(Mick Jagger) .
4. Education a stepping stone (Rush Holt)
5. Losers can’t get an SET (or any good) job.
6. Employers misjudge person’s capabilities.
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Kahn SEWP October 19
?
?
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Leaving field for family reasons, job location,
working conditions: worse off in wage, less job
satisfaction
1. Technological change  education useless.
2. SET education is subsidized or over-encouraged.
3. Random post-ed job offers within/outside field (Mick Jagger) .
4. Education a stepping stone (Rush Holt)
5. Losers can’t get an SET (or any good) job.
6. Employers misjudge person’s capabilities.
7. Unexpected developments unrelated to field.
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Kahn SEWP October 19
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