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Causes of Overeducation in the Australian Labour Market

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  • Ingrid Linsley

    ()
    (Research Bank of Australia, Sydney)

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    Abstract

    Overeducation is a form of labour underutilization which occurs when the formal education level of a worker exceeds that which is required for the job. In Australia close to 30 per cent of workers are overeducated and are underutilising their skills. Using data from the Negotiating the Life Course survey, this study determines the causes of overeducation in Australia. Four of the key theories that have been used to explain overeducation are tested: human capital, job competition, assignment and the career mobility theories. Tests show that the job competition model best explains the existence of overeducation in the Australian labour market.

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    Bibliographic Info

    Article provided by Bankwest Curtin Economics Centre (BCEC), Curtin Business School in its journal Australian Journal of Labour Economics.

    Volume (Year): 8 (2005)
    Issue (Month): 2 (June)
    Pages: 121-143

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    Handle: RePEc:ozl:journl:v:8:y:2005:i:2:p:121-143

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    Postal: GPO Box U1987, Perth WA 6845
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    Web page: http://business.curtin.edu.au/research/publications/journals/ajle/
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    Related research

    Keywords: Analysis of Education; Human Capital; Skills; Occupational Choice; Labor Productivity (Formal Training Programs; On-the-Job Training) Time Allocation; Work Behavior; and Employment Determination;

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    Cited by:
    1. Seamus McGuinness & Mark Wooden, 2007. "Overskilling, Job Insecurity and Career Mobility: Evidence from Australia," Melbourne Institute Working Paper Series wp2007n09, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    2. Tani, Massimiliano, 2012. "Does immigration policy affect the education--occupation mismatch? Evidence from Australia," Australian Bulletin of Labour, National Institute of Labour Studies, vol. 38(2), pages 111-141.
    3. Mañé Vernet, Ferran & Miravet, Daniel, 2010. "Sobreeducación y Sobrecualificación en los Universitarios Catalanes. Una perspectiva de género," Working Papers 2072/179592, Universitat Rovira i Virgili, Department of Economics.
    4. Croce, Giuseppe & Ghignoni, Emanuela, 2011. "Overeducation and spatial flexibility in Italian local labour markets," MPRA Paper 29670, University Library of Munich, Germany.
    5. Carroll, David & Tani, Massimiliano, 2013. "Over-education of recent higher education graduates: New Australian panel evidence," Economics of Education Review, Elsevier, vol. 32(C), pages 207-218.
    6. Mavromaras, Kostas G. & McGuinness, Seamus & Fok, Yin King, 2007. "Assessing the Incidence and Wage Effects of Over-Skilling in the Australian Labour Market," IZA Discussion Papers 2837, Institute for the Study of Labor (IZA).
    7. Kitae Sohn, 2010. "The Role of Cognitive and Noncognitive Skills in Overeducation," Journal of Labor Research, Springer, vol. 31(2), pages 124-145, June.
    8. Tsai, Yuping, 2010. "Returns to overeducation: A longitudinal analysis of the U.S. labor market," Economics of Education Review, Elsevier, vol. 29(4), pages 606-617, August.

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