months full-time work in a given year.<sup>25</sup> Hence in this context an individual is said to be overeducated if he possesses more education than the “Danish norm” in his occupation category.

Table 9 shows that there is large variation in how broad and narrow the limits defining adequate education are in the various occupation categories. Among individuals employed as ‘Stationary plant and related operators’ (DISCO 81), for example, adequate education is anywhere between 8.5 and 14.1 years of schooling, respectively, whereas individuals employed as ‘Models, salespersons and demonstrators’ are adequately educated if they have precisely 13 years of schooling. Also, the categories vary according to how asymmetric the definition of adequate education is relative to the median. Among “Agricultural, fishery and related workers” (DISCO 92), for example, the median is closer to the lower limit, while for “Life science and health associate professionals” (DISCO 32) the median is closer to the upper level. In particular, note that individuals with less than 13.0 years of education (i.e. individuals with no more than either primary or secondary schooling) cannot, by this definition, be overeducated. All the upper limits defining adequate education are at least 13.0 years.

# **_4.2. Determinants of overeducation_**

After having presented the method used to determine the incidence of overeducation (results of which are presented and discussed in Section 5.1 below), this section describes the econometric method used to identify important determinants of overeducation. As the review in Section 2 showed, there are a number of possible explanations as to why overeducation occurs, for which types of workers and under which particular circumstances. While there are no clear-cut conclusions, we can formulate some expectations about which factors are important in determining an individual’s risk or probability of being overeducated. These are labor market experience, age, ethnicity, language skills, source of education<sup>26</sup> and years since migration. Yet, the review also left open the possibility that part of the remaining reason for being overeducated may well simply be caused by individual heterogeneity.<sup>27</sup> Within a group of workers with the same education, some are more skilled (in aspects that are not necessarily captured by formal education), more motivated and more able than others. Examples of relevant, but for the researcher unobservable, personal characteristics could be health, leadership skills, management skills, ability to work in teams, creativity, and IT-skills.

> 25 We have chosen to base the limits on native Danes so as not to let the large differences between immigrants with a Danish and a foreign education interfere with the overall picture.

> 26 In the available data, we can observe whether an immigrant has obtained his degree in his home country or in Denmark. What we cannot observe is the quality or applicability/relevance of a foreign degree in the Danish labour market. This may affect the probability of becoming overeducated, but we lack the information necessary to disclose such effects.

> 27 Böhlmark (2003) finds evidence in the Swedish labour market that there is a great deal of unobserved heterogeneity among the overeducated. Examining transitions over time, he finds that more than 50% of workers found to be overeducated at the beginning of the study period are still poorly matched 10 years later (based on data for individuals observed in 1981 and 1991 and then for individuals observed in 1991 and 2000). Yet, the remaining half leaves overeducation and manages to close the initial wage-gap relative to adequately matched workers with the same level of education. These results serve to underline the unobserved heterogeneity among the group of overeducated workers.

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