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Assessing the Incidence and Wage Effects of Overskilling in the Australian Labour Market

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  • KOSTAS MAVROMARAS
  • SEAMUS MCGUINNESS
  • YIN KING FOK

Abstract

This paper examines the incidence and wage effects of overskilling in Australia. It finds that approximately 30 per cent of employees believed themselves to be moderately overskilled and 11 per cent believed themselves to be severely overskilled. 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 overskilled workers suffer an average wage penalty of 10.2 per cent with the penalty ranging from about 6 per cent among vocationally qualified employees to just less than 20 per cent for graduates.

Suggested Citation

  • Kostas Mavromaras & Seamus Mcguinness & Yin King Fok, 2009. "Assessing the Incidence and Wage Effects of Overskilling in the Australian Labour Market," The Economic Record, The Economic Society of Australia, vol. 85(268), pages 60-72, March.
    • Handle: RePEc:bla:ecorec:v:85:y:2009:i:268:p:60-72
    DOI: 10.1111/j.1475-4932.2008.00529.x
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    References listed on IDEAS

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    More about this item

    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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