Overqualification of graduates: assessing the role of family background

Overqualification signals a mismatch between jobs' educational requirements and workers' qualifications implying potential productivity losses at the macro and the micro level. This study explores how the family background of German graduates affects the probability to hold a job that does not require tertiary education, i.e. to be overqualified. Potential pathways of the family background effects are discussed and proxy variables for the mediating factors ability and skills, study characteristics, social capital, financial capital, and aspiration are incorporated into the empirical analysis. Graduates from high status families are found to be less likely to be overqualified. The unconditional social overqualification gap amounts to 7.4 percentage points. Blinder-Oaxaca decompositions of the overqualification gap show that differences in ability and skills, study characteristics, and social capital are important mediators of the family background effects.