Abstract |
The aim of this paper is to explore and quantify the extent of how the quality of higher education explains professional underemployment in Peru. Under this condition, four out of ten university graduates in 2012 turn out to be over-qualified, ending up taking non-professional and under-waged vacancies. The paper uses survey data from the National Household Survey (Encuesta Nacional de Hogares - ENAHO) and the National University Census (CENAUM) for the years 1996 and 2010. With this data, the paper estimates a discrete-choice model to measure the effect of university quality on individual long-run underemployment conditions. The source of variation that allows to identify such effects hinges on the institutional liberalization and deregulation process occurred in the higher education market during the 1990s with the passing of the law to promote investment in higher education and the creation of the CONAFU (A national council in charged of allowing prospective universities to start operations). The results indicate that the underemployment probability, for those graduates that attended low-quality universities, increased from 0.19 to 0.30 due to the deregulation process. |