Overeducation and spatial flexibility: new evidence from Italian survey data

This paper studies the relationship between internal mobility and overeducation. Using a large survey on the Italian labour market, it estimates the effect of workers’ spatial flexibility (precise information on commuting and migration) on their probability of being overeducated. The analysis tries to deal with two possible causes of misspecification, which can bias the correlation between migration and overeducation downward: the endogeneity of migration and the omission of relevant job characteristics. This adds to the received literature. It also deals with selection into employment and controls for area and personal characteristics, including several proxies for individual’s ability. Results show that commuting is positively correlated with the quality of the education-job match. On the contrary, the conventional wisdom that internal migration unambiguously reduces the incidence of overeducation does not receive empirical support. The negative correlation between migration and overeducation vanishes once job characteristics are included in the analysis and becomes positive when migration is instrumented. These findings can be easily rationalized by incorporating some of the suggestions of the literature on international migration into the standard framework used in spatially-based explanations for overeducation. From a policy perspective, it seems fair to conclude that the link between internal migration and overeducation remains unclear and that further research is needed in order to better ground policy prescriptions.