Unobserved Heterogeneity in Overeducation Models: Is Personality More Important than Ability?

This paper compares the performance of selected personality aspects and ability on explaining the overeducation status of the individual. Ability is defined as the difference between the actual and the predicted income. Personality proves to be an important factor affecting the risk of overeducation. For females, personality allows to better explain mismatch than ability. For males, ability frequently, but not always, performs better than personality. Controlling for personality allows for better classification of the non-overeducated, while controlling for ability improves the classification of the overeducated. The study is done on the pooled sample of 23 European countries, as well as for Eastern, Western, Northern, and Southern Europe.