The paper provides a theoretical foundation for the empirical regularities observed in estimations of wage consequences of overeducation and undereducation. Workers with more education than required for their jobs are observed to suffer wage penalties relative to workers with the same education...

While uncertainty abounds in almost any decision on investment in schooling, it is mostly ignored in research and virtually absent in labour economics text books. This paper documents the scope for risk, discusses the tough disentanglement of heterogeneity and risk, surveys the analytical...

The survey primarily seeks to expose the literature, presumably in a well-organized framework. There is no attempt to present any new analyses; only the chapter that lays out the potential scope for the presence of risk in schooling decisions contains some data specifically collected and...