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Optimal 'Mismatch' and Promotions


  • Hersch, Joni


Seeming 'mismatches,' in which workers are either under- or overqualified, are shown to be optimal. From the firm's point of view, although turnover will be positively related to overqualification, training costs will be inversely related to overqualification. Further, overqualified workers constitute a pool from which promotions are made. Workers enter seeming mismatches due to search and mobility costs and because of opportunities for promotion. Estimates using a unique data set indicate that workers who are overqualified at hire receive less training and more promotions and that workers overqualified for their current job are more likely to quit. Copyright 1995 by Oxford University Press.

Suggested Citation

  • Hersch, Joni, 1995. "Optimal 'Mismatch' and Promotions," Economic Inquiry, Western Economic Association International, vol. 33(4), pages 611-624, October.
  • Handle: RePEc:oup:ecinqu:v:33:y:1995:i:4:p:611-24

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    References listed on IDEAS

    1. Lang, Kevin, 1989. "Why was there mandatory retirement?," Journal of Public Economics, Elsevier, vol. 39(1), pages 127-136, June.
    2. Stiglitz, Joseph E, 1987. "The Causes and Consequences of the Dependence of Quality on Price," Journal of Economic Literature, American Economic Association, vol. 25(1), pages 1-48, March.
    3. Dickens, William T & Lundberg, Shelly J, 1993. "Hours Restrictions and Labor Supply," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(1), pages 169-192, February.
    4. Bulow, Jeremy I & Summers, Lawrence H, 1986. "A Theory of Dual Labor Markets with Application to Industrial Policy,Discrimination, and Keynesian Unemployment," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages 376-414, July.
    5. Kahn, Shulamit & Lang, Kevin, 1991. "The Effect of Hours Constraints on Labor Supply Estimates," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 605-611, November.
    6. Levine, David I, 1991. "Just-Cause Employment Policies in the Presence of Worker Adverse Selection," Journal of Labor Economics, University of Chicago Press, vol. 9(3), pages 294-305, July.
    7. Dickens, William T, et al, 1989. "Employee Crime and the Monitoring Puzzle," Journal of Labor Economics, University of Chicago Press, vol. 7(3), pages 331-347, July.
    8. Levine, David I, 1989. "Just-Cause Employment Policies When Unemployment Is a Worker Discipline Device," American Economic Review, American Economic Association, vol. 79(4), pages 902-905, September.
    9. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-444, June.
    10. Joseph G. Altonji & Christina H. Paxson, 1986. "Job Characteristics and Hours of Work," NBER Working Papers 1895, National Bureau of Economic Research, Inc.
    11. Lazear, Edward P, 1981. "Agency, Earnings Profiles, Productivity, and Hours Restrictions," American Economic Review, American Economic Association, vol. 71(4), pages 606-620, September.
    12. Goldin, Claudia, 1992. "Understanding the Gender Gap: An Economic History of American Women," OUP Catalogue, Oxford University Press, number 9780195072709.
    13. George A. Akerlof & Lawrence F. Katz, 1989. "Workers' Trust Funds and the Logic of Wage Profiles," The Quarterly Journal of Economics, Oxford University Press, vol. 104(3), pages 525-536.
    14. James B. Rebitzer & Lowell J. Taylor, 1991. "Work Incentives and the Demand for Primary and Contingent Labor," NBER Working Papers 3647, National Bureau of Economic Research, Inc.
    15. Shulamit B. Kahn & Kevin Lang, 1995. "The Causes of Hours Constraints: Evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 28(4a), pages 914-928, November.
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    17. Altonji, Joseph G & Paxson, Christina H, 1988. "Labor Supply Preferences, Hours Constraints, and Hours-Wage Trade-Offs," Journal of Labor Economics, University of Chicago Press, vol. 6(2), pages 254-276, April.
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    Cited by:

    1. Melanie K. Jones & Richard J. Jones & Paul L. Latreille & Peter J. Sloane, 2009. "Training, Job Satisfaction, and Workplace Performance in Britain: Evidence from WERS 2004," LABOUR, CEIS, vol. 23(s1), pages 139-175, March.
    2. repec:spr:italej:v:3:y:2017:i:2:d:10.1007_s40797-017-0053-3 is not listed on IDEAS
    3. H. Battu & C. R. Belfield & P. J. Sloane, 1999. "Overeducation Among Graduates: a cohort view," Education Economics, Taylor & Francis Journals, vol. 7(1), pages 21-38.
    4. Kucel, Aleksander & Byrne, Delma, 2008. "Are Over-educated People Insiders or Outsiders? A Case of Job Search Methods and Over-education in UK," Papers WP258, Economic and Social Research Institute (ESRI).
    5. Barbara Ermini & Luca Papi & Francesca Scaturro, 2016. "Over-education among italian Ph.D. graduates. Does the crisis make a difference?," Mo.Fi.R. Working Papers 126, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    6. Asplund, Rita & Lilja, Reija, 1998. "Labour Market Transitions in Finland. Does background matter?," Discussion Papers 660, The Research Institute of the Finnish Economy.
    7. repec:kap:iaecre:v:11:y:2005:i:1:p:93-109 is not listed on IDEAS
    8. Joaquín Artés & Maria del Salinas-Jiménez & Javier Salinas-Jiménez, 2014. "Small Fish in a Big Pond or Big Fish in a Small Pond? The Effects of Educational Mismatch on Subjective Wellbeing," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 119(2), pages 771-789, November.

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