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Assessing the Incidence and Wage Effects of Over-Skilling in the Australian Labour Market

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Author Info
Kostas Mavromaras () (MIAESR, University of Melbourne and IZA)
Seamus McGuinness () (MIAESR, University of Melbourne)
Yin King Fok () (MIAESR, University of Melbourne)

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Abstract

This paper examines the incidence and wage effects of over-skilling within the Australian labour market. It finds that approximately 30 percent of employees believed themselves to be moderately over-skilled and 11 percent believed themselves to be severely over-skilled. The incidence of skills mismatch varied little when the sample was split by education. After controlling for individual and job characteristics as well as the potential bias arising from individual unobserved heterogeneity, severely over-skilled workers suffer an average wage penalty of 13.3 percent with the penalty ranging from about 8 percent among vocationally qualified employees to over 20 percent for graduates.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2837.

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Length: 35 pages
Date of creation: Jun 2007
Date of revision:
Handle: RePEc:iza:izadps:dp2837

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Related research
Keywords: skills; education;

Other versions of this item:

Find related papers by JEL classification:
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Francis Green & Steven McIntosh, 2007. "Is there a genuine under-utilization of skills amongst the over-qualified?," Applied Economics, Taylor and Francis Journals, vol. 39(4), pages 427-439. [Downloadable!] (restricted)
  2. Parvinder Kler, 2005. "Graduate overeducation in Australia: A comparison of the mean and objective methods," Education Economics, Taylor and Francis Journals, vol. 13(1), pages 47-72, March. [Downloadable!] (restricted)
  3. Ingrid Linsley, 2005. "Causes of Overeducation in the Australian Labour Market," Australian Journal of Labour Economics (AJLE), The Centre for Labour Market Research (CLMR), Curtin Business School, vol. 8(2), pages 121-143, June.
  4. Ingrid Linsley, 2005. "Causes of Overeducation in the Australian Labour Market," Department of Economics - Working Papers Series 940, The University of Melbourne. [Downloadable!]
  5. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November. [Downloadable!]
  6. Sattinger, Michael, 1993. "Assignment Models of the Distribution of Earnings," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 831-80, June. [Downloadable!] (restricted)
  7. Séamus McGuinness, 2006. "Overeducation in the Labour Market," Journal of Economic Surveys, Blackwell Publishing, vol. 20(3), pages 387-418, 07. [Downloadable!] (restricted)
  8. Derby Voon & Paul W. Miller, 2005. "Undereducation and Overeducation in the Australian Labour Market," The Economic Record, The Economic Society of Australia, vol. 81(s1), pages S22-S33, 08. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Kostas Mavromaras & Seamus McGuinness & Yin King Fok, 2009. "Overskilling Dynamics and Education Pathways," Melbourne Institute Working Paper Series wp2009n22, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
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