Do you have more education than your co-workers in the same job? You might think it's setting you up for a path of greater success and promotion, but recent evidence suggests that it could actually be harming your career. 

Not only are you going to earn less money, on average, you're also less likely to find a better job.

About 37% of college graduates have more education than their jobs require, so unfortunately this is a pretty common problem.

Overeducated workers make less money
Say you start your career in a job for which you're overqualified. 

Maybe you entered the workforce during the recession, or you just needed to get going with something. Unfortunately, due to the wage penalties of being overqualified, that one job will cost you an average of nearly 4% in lost earnings.

Not only will you be underpaid at the outset, but the effects of those lost wages will stay with you. One long-term study found that people who were overeducated in at least one past job had 2.6%-4.2% lower wages per year over the course of the following decade.

To put this in context, a single bout of unemployment costs you a total of 7.6% in lost earnings. That means that being overqualified is almost as bad for you as being unemployed, and being overqualified affects your earnings for far longer than unemployment does.

Overeducated workers are more likely to stay overeducated
Part of the problem is that once you're in a position where you have "too much" schooling for your job, it's likely to stay that way. For people with at least some college, the likelihood of being overqualified can remain stubbornly high even after a decade in the workforce.

To put some numbers on it, after being overeducated for three years, the probability of transitioning into a job that "matches" your education level (or even one for which you're underqualified) goes from 39% to 20%. 

In other words, you're half as likely to find a job commensurate with your education after just three years of being overeducated. After five years, the probability drops further to 15%, and after 10 years it's just 10%.

This means that being overqualified is not the path to promotions and career advancement. Just the opposite: The longer you're overqualified, the less likely you are to be recognized for your academic achievements. 

Who is overeducated?
There are some troubling demographic issues at work here as well. 

Women are 5%-13% more likely to be overeducated than men, and black and Hispanic workers with two years of college are 12%-16% more likely to be overeducated than white workers.

The worst part is that these groups are more likely to stay overeducated relative to men and white workers over the long run -- and to pay for it with lower wages. The authors of the long-term study suggest that this might be one of the mechanisms behind wage gaps in general, but that hasn't been firmly established just yet.

Either way, the negative effects of overeducation carries some powerful lessons. 

The big one? Whatever you do, do not think you're doing yourself a favor by taking a job requiring less education than you have. You're not only going to earn less now, but chances are you're going to get paid less for a long time into the future. Not only that, but for each year you stay overqualified, your career prospects grow dimmer and dimmer. 

It's a scary thought, and one that affects female, black, and Hispanic workers disproportionately.

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