The Impact of Educational Mismatch on Firm Productivity: Evidence from Linked Panel Data

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Stephan Kampelmann. François Rycx.
We provide first evidence regarding the direct impact of educational mismatch on firm
productivity. To do so, we rely on representative linked employer-employee panel data for
Belgium covering the period 1999-2006. Controlling for simultaneity issues, time-invariant
unobserved workplace characteristics, cohort effects and dynamics in the adjustment
process of productivity, we find that: i) a higher level of required education exerts a
significantly positive influence on firm productivity, ii) additional years of over-education (both
among young and older workers) are beneficial for firm productivity, and iii) additional years
of under-education (among young workers) are detrimental for firm productivity.

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