This paper examines the phenomenon of over-education in the labor market, where many workers report having more schooling than required by their jobs. The author investigates the relationship between schooling, wages, and worker mobility across firms and occupations. The study uses data from the Panel Study of Income Dynamics (PSID) to analyze the effects of over- and under-education on wages and labor mobility. The paper finds that over-educated workers (those with more schooling than required) tend to be younger, have less on-the-job training, and experience higher rates of firm and occupational mobility. They also earn lower wages than similarly educated workers in jobs requiring the same level of schooling. Under-educated workers (those with less schooling than required) are older, have more on-the-job training, and experience lower rates of firm mobility but higher rates of occupational mobility. They earn higher wages than similarly educated workers in jobs requiring the same level of schooling. The study also explores the implications of these findings for human capital theory. It suggests that discrepancies between actual and required schooling may result from differences in the total level of human capital, including on-the-job training, or from a mismatch between workers and jobs. The results support the idea that over-education is not necessarily a waste of resources but may reflect a trade-off between schooling and other forms of human capital. The paper concludes that the observed discrepancies in schooling and wages are influenced by factors such as worker characteristics, job requirements, and mobility patterns. The findings challenge the validity of human capital theory in explaining the relationship between education and wages, suggesting that other factors, such as quality differences among workers, may also play a role. The study provides empirical evidence that over-education is a significant phenomenon in the labor market, with implications for policy and economic theory.This paper examines the phenomenon of over-education in the labor market, where many workers report having more schooling than required by their jobs. The author investigates the relationship between schooling, wages, and worker mobility across firms and occupations. The study uses data from the Panel Study of Income Dynamics (PSID) to analyze the effects of over- and under-education on wages and labor mobility. The paper finds that over-educated workers (those with more schooling than required) tend to be younger, have less on-the-job training, and experience higher rates of firm and occupational mobility. They also earn lower wages than similarly educated workers in jobs requiring the same level of schooling. Under-educated workers (those with less schooling than required) are older, have more on-the-job training, and experience lower rates of firm mobility but higher rates of occupational mobility. They earn higher wages than similarly educated workers in jobs requiring the same level of schooling. The study also explores the implications of these findings for human capital theory. It suggests that discrepancies between actual and required schooling may result from differences in the total level of human capital, including on-the-job training, or from a mismatch between workers and jobs. The results support the idea that over-education is not necessarily a waste of resources but may reflect a trade-off between schooling and other forms of human capital. The paper concludes that the observed discrepancies in schooling and wages are influenced by factors such as worker characteristics, job requirements, and mobility patterns. The findings challenge the validity of human capital theory in explaining the relationship between education and wages, suggesting that other factors, such as quality differences among workers, may also play a role. The study provides empirical evidence that over-education is a significant phenomenon in the labor market, with implications for policy and economic theory.