The theory of career mobility (Sicherman and Galor 1990) claims that wage penalties for overeducated workers are compensated by better promotion prospects. Sicherman (1991) was able to confirm this theory in an empirical study. However, the controls for the opposing phenomenon of undereducation...

This paper investigates the effect of displacement on reemployment wages of socially insured West German workers who became unemployed in 1986. Because detailed information on the cause of job loss is unavailable, displacement status is imputed using a probit estimated on the German...