Italian Ph.D. holders and mismatch in education and skills

Ph.D. education is a key element in innovation and the generation of new knowledge. Nevertheless, in Italy, the share of doctoral graduates is still lower than the average for OECD member countries. This paper investigates the effectiveness of doctoral education and the extent to which the Italian labour market properly absorbs the rising flow of Ph.D. holders. The effectiveness is assessed from the twofold perspective of the formal relevance of a Ph.D. qualification in the labour market and the substantial applicability of skills acquired to different occupations inside and outside university. Logit models enable sketches of the main determinants of overeducation and overskilling among Italian Ph.D.'s, whereas log-earnings equations allow assessment of the role of educational and skills mismatches in terms of wage penalties. Oaxaca-Blinder decompositions help analyse some causes of these mismatches. The different patterns of overeducation and overskilling among Ph.D. holders working inside and outside academe lead to different degrees of pay penalties.