The Limits of Education

We know there's a lack of educated workers, not only in the United States, but also throughout the industrialized world. We also know a higher level of education is associated with higher pay. Take a look at this graphic of median wages for U.S. men (results are similar for women):

(Let's ignore the fact that there has been almost NO GAIN in pay across all levels of education over the last 15 years.)

A growing body of research is revealing that too much education may actually be a waste of time -- as far as your job is concerned.

This might already be obvious: if we were to add a line in the graph above for the median wage level of PhDs, it would fall between the lines for professional degree and Master's degree, even though getting a PhD requires more education.

But what happens to your abilities when you're in a job that you're overeducated for? Or the reverse: If you're in a job that you don't have enough education for? And is overeducation a short-term phenomenon that's corrected with the overeducated worker eventually finding a job that matches his brain power?

To find out, a quartet of researchers looked at 447 workers in the Netherlands who were tested on their cognitive abilities over an eight-year period. The researchers measured a worker's

• ability to recall words over both short and longer time periods


• ability to restructure knowledge (take this test here)


• verbal fluency using a test similar to Scattergories


• information processing speed

The quartet weren't able to take apart the difference between overeducation and undereducation, but their results are nonetheless interesting. They found that:

• The cognitive abilities that show the most wear and tear for the overeducated, and growth for the undereducated, are recall abilities and verbal fluency.


• Book smarts is not a factor: Overeducated workers had the same brain power as workers with a job that matched their level of education.


• It also not about street smarts: People working in jobs their education doesn't qualify them for don't have any more brain power either.


• A mismatch between job and education level influences a worker's immediate and delayed recall abilities, their verbal fluency, and adaptability of knowledge.


• There is a wage penalty for overeducation in the range of 10 to 17 percent. Similarly their is a wage reward for undereducation in that same range.


• Only 10 percent of overeducated workers who stayed employed over the eight years moved to jobs that matched their level of education. Meahwhile, 8 percent of the undereducated moved to a job that matched their education level.