Contents lists available at ScienceDirect Journal of Business Research journal homepage: www.elsevier.com/locate/jbusres Can entrepreneurship channel overqualification in young university graduates in the European Union? Fernando Crecente-Romero a , Mónica Giménez-Baldazo a , Luis F. Rivera-Galicia b, ⁎ a Department of Economics and Management, University of Alcalá, Spain b Department of Economics, University of Alcalá, Spain ARTICLE INFO Keywords: Entrepreneurship FsQCA Tertiary education TEA Education expenditure ABSTRACT Human Capital Theory states that the higher a person's educational level, the higher their productivity and earnings. However, young university graduates sometimes find it difficult to enter the labor market due to their overqualification. The increase of qualified workers entails a decrease in their salaries when employed by others. One solution to the personal and economic costs of overqualification may be the creation of self-employment through entrepreneurship. For this reason, the EU 2020 strategy includes entrepreneurship principles in all educational levels to improve employability. This research focuses on the European population of under-25-year- olds with tertiary studies between 2009 and 2014. FsQCA is used to analyze the relationships among early entrepreneurship rates (GEM), expenditure on tertiary education (Eurostat), and overqualification levels (OECD) by country. Our findings show that there is a relationship between qualified entrepreneurial activity and young people, but none between educational investment and the entrepreneurial activity of young people. 1. Introduction Most countries are concerned about their economic situation and wish to create solid economies with low unemployment rates. Entrepreneurship is the key factor to achieve that goal (Devece, Peris- Ortiz, & Rueda-Armengot, 2016). As part of its efforts to foster en- trepreneurial values in education, the European Union's Horizon 2020 program is committed to entrepreneurship training at all levels (European Commission, 2013). The program rests on three main pillars: increasing education in entrepreneurship at all educational levels as a path toward business growth; ensuring flexible environments to favor business creation; and creating role typologies to extend en- trepreneurship to specific population groups (the unemployed, im- migrants…). In a nutshell, the overall goal is to provide people with basic competencies that permit their personal and professional devel- opment as entrepreneurs. Traditionally, most entrepreneurs have had low qualification levels; some may even have abandoned their formal education at an early age. By the start of the 21st century, mandatory education meant an im- provement in the average educational level of entrepreneurs. Empirical evidence shows that most entrepreneurs have received primary and secondary education, while in recent years, there has been an increase in the number of entrepreneurs with tertiary studies (GEM, 2010, 2015). However, there is great disparity between the northern and southern countries of the European Union. In Mediterranean countries like Italy (25.7%) or Portugal (25.2%), for example, the percentage of entrepreneurs with tertiary studies is below the European Union average (40.1%), while in France (54.1%) or Germany (49.5%) it is above it. In other cases, like Spain, a lot of entrepreneurs have only completed their mandatory education (36.9%) (Eurostat, 2014). Due to regional characteristics, any analysis must be multi- dimensional. At a European level, the REDI index (Regional Entrepreneurship and Development Index) considers the individual dimension of business creation as well as a set of regional and institu- tional variables. REDI uses variables such as educational quality, en- trepreneurial risk, transference of technology, and competitiveness and takes into account business heterogeneity and labor markets diversity from country to country to propose measures that foster en- trepreneurship and eliminate bottlenecks deriving from the educational system (Greckhamer, 2011). In addition, a country's cultural values may affect its perception and attitudes to entrepreneurship (Benyon, Jones, & Pickernell, 2016; Castaño, Méndez, & Galindo, 2015; Crecente, Giménez, & Rivera-Galicia, 2016). The entrepreneur's training level has a direct influence on man- agerial improvement, knowledge generation and a region's competi- tiveness. GEM research has detected positive relations between tertiary education and business survival (Coduras, Urbano, Rojas, & Martínez, 2008) due to greater management knowledge. Today, knowledge https://doi.org/10.1016/j.jbusres.2018.01.056 Received 18 June 2017; Received in revised form 22 January 2018; Accepted 25 January 2018 ⁎ Corresponding author. E-mail address: luisf.rivera@uah.es (L.F. Rivera-Galicia). Journal of Business Research xxx (xxxx) xxx–xxx 0148-2963/ © 2018 Elsevier Inc. All rights reserved. Please cite this article as: Crecente-Romero, F., Journal of Business Research (2018), https://doi.org/10.1016/j.jbusres.2018.01.056