The sex and the uni: Educational assortative matching and over-education

Educational assortative matching encourages individuals to acquire education so as to increase the probability of marrying a high-income partner. But since everyone is more educated, the chances of a good match do not change. Hence over-education emerges, as in absence of educational assortative matching individuals could reach their optimal level of education by exploiting less educational resources. Over-education is stronger the higher the probability of educational assortative matching, the larger the relative importance of the partner’s income in determining utility and ability levels, and the lower the cost of education. Government intervention can reach a socially efficient level of education through either a tax on education or income.