Is a liberal school-to-work system more ‘meritocratic’? Overeducation, social origin, and early career mobility in Germany and the United Kingdom

Abstract

This study examines the unfolding of early career trajectories of individuals entering the workforce overeducated, focusing on whether an advantaged social background compensates for initial occupational penalties across different institutional settings. Spline regression models with inverse probability weighting are performed to predict occupational achievements over the first 10 years after labour market entry for overeducated and adequately matched entrants from different classes of origin. To this end, we draw on representative longitudinal data, namely SOEP for Germany and BHPS-UKHLS for the United Kingdom, leveraging Labour Force Survey information on year- and occupation-specific educational modes to define overeducated entrants. Findings reveal that institutional settings do shape compensatory dynamics. In Germany, upward mobility among overeducated workers appears more strongly stratified by social background, with better chances to compensate for initial disadvantages observed among entrants from advantaged origins. By contrast, those from lower social backgrounds tend to experience a higher risk of remaining entrapped. In the United Kingdom, career trajectories of overeducated entrants show faster recoveries from initial penalties across social origins, although initial disadvantages are not fully offset. While these patterns hold primarily among secondary-educated entrants, degree holders experience the largest disadvantages when entering overeducated in both countries, yet showing little variation by social origin in their subsequent career progression.