Abstract

Empirical evidence on educational mismatch and earnings often produces results that suggest a wage premium for those overeducated and a penalty for the undereducated. These results may, however, be driven by how educational mismatch is measured. The central problem, thus, hinges on the consistency of measures and estimation techniques used. This chapter uses micro data from the 2012/13 Ghana Living Standards Survey to evaluate empirical methodologies that relate to the measurement of educational mismatch and earnings. The realised matches method and objective method are used to show evidence of the incidence of educational mismatch among wage workers and their effects on earnings. In addition, the chapter takes into account the issue of self-selection into wage work and addresses this by using the Heckman correction technique.