Abstract
<jats:p>The aim of this paper is to identify the incidence of overeducation, its determinants, and its impact on workers' wages in Croatia. The analysis was conducted on a sample of respondents from Croatia using data from the 2022 and 2023 PIAAC survey. Overeducation was measured subjectively by comparing respondents' level of formal education with the level of education they themselves considered necessary for their work. A total of 30.3% of respondents stated that their work did not fully utilise their educational qualifications. To analyse the determinants of overeducation, the Heckman selection model was used to correct for possible bias in the sample due to the inclusion of only employed respondents. Area of education, experience, and business ownership were found to be statistically significant determinants of overeducation. The impact of overeducation on wages was assessed using a regression model, which found that overeducated employees earn statistically significantly less than colleagues with similar educational qualifications who perform jobs corresponding to their level of education.</jats:p>