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Overqualification: major or minor mismatch?

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  • Brynin, Malcolm
  • Lichtwardt, Beate
  • Longhi, Simonetta

Abstract

A large empirical literature suggests that a proportion of employees are over-educated (overqualified) for the jobs that they do. It also estimates the impact of this mismatch on wages The empirical results suggest that having more education than is needed for a job generates a premium relative to the job but at the same time a penalty relative to the qualification. This mismatch is often explained either by variation in skills or by a slow start to career. Both explanations are compatible with human capital theory. We measure the incidence of overqualification in four European countries: Britain, Italy, Germany and Norway at differing educational levels, to show that overqualification is most common at the lower levels where careers tend to be flatter. The inclusion of a measure of computer skills also seems to make little difference to the relationship between overqualification and wages. However, one issue which is important is the degree of voluntarism that is associated with progression through education. Overqualification is traditionally measured through years of education required for the job and years spent in education, but this can be separated into a part that reflects the achievement of certificates and a part that reflects the passage of time. The latter is strongly influenced by individual motivation which determines final choices and by institutional factors which might either enhance or constrain these. We isolate the number of excess years a person spends in education without reaching the next qualification level in order to use this as an instrument for over-education. Our results suggest that the impact of over-qualification on wages is rather small, and becomes even smaller when the excess years spent in education are used as instrument for over-education. Overqualification can on these results never be interpreted as a labour-market choice which provides some sort of human-capital premium.

Suggested Citation

  • Brynin, Malcolm & Lichtwardt, Beate & Longhi, Simonetta, 2006. "Overqualification: major or minor mismatch?," ISER Working Paper Series 2006-17, Institute for Social and Economic Research.
  • Handle: RePEc:ese:iserwp:2006-17
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    Cited by:

    1. Longhi, Simonetta & Brynin, Malcolm, 2010. "Occupational change in Britain and Germany," Labour Economics, Elsevier, vol. 17(4), pages 655-666, August.
    2. Vallizadeh, Ehsan & Muysken, Joan & Ziesemer, Thomas, 2015. "Offshoring of medium-skill jobs, polarization, and productivity effect : implications for wages and low-skill unemployment," IAB Discussion Paper 201507, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Floro Ernesto Caroleo & Francesco Pastore, 2012. "Overeducation at a glance. Determinants and wage effects of the educational mismatch, looking at the AlmaLaurea data," Discussion Papers 18_2012, CRISEI, University of Naples "Parthenope", Italy.
    4. Altorjai, Szilvia, 2013. "Over-qualification of immigrants in the UK," ISER Working Paper Series 2013-11, Institute for Social and Economic Research.
    5. International Labour Office., 2013. "Global employment trends for youth 2013 : a generation at risk," Global Employment Trends Reports 994816973402676, International Labour Office, Economic and Labour Market Analysis Department.
    6. Oliver Fabel & Razvan Pascalau, 2007. "Recruitment of Overeducated Personnel: Insider-Outsider Effects on Fair Employee Selection Practices," TWI Research Paper Series 18, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    7. Léné, Alexandre, 2011. "Occupational downgrading and bumping down: The combined effects of education and experience," Labour Economics, Elsevier, vol. 18(2), pages 257-269, April.
    8. Vallizadeh, Ehsan & Muysken, Joan & Ziesemer, Thomas, 2016. "Offshoring Medium-Skill Tasks, Low-Skill Unemployment and the Skill-Wage Structure," MPRA Paper 75581, University Library of Munich, Germany.
    9. Shirley Dex & Jo Lindley, 2007. "Labour market job matching for UK minority ethnic groups," Working Papers 2007003, The University of Sheffield, Department of Economics, revised Jan 2007.
    10. Muysken, Joan & Vallizadeh, Ehsan & Ziesemer, Thomas, 2012. "The impact of Medium-Skilled immigration: A general equilibrium approach," MERIT Working Papers 055, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    11. Muysken, Joan & Vallizadeh, Ehsan & Ziesemer, Thomas, 2012. "Migration, Unemployment, and Over-qualification: A Specific Factors-Model Approach," EconStor Preprints 67479, ZBW - German National Library of Economics.
    12. Belfield, Clive, 2010. "Over-education: What influence does the workplace have?," Economics of Education Review, Elsevier, vol. 29(2), pages 236-245, April.
    13. Caroleo, Floro Ernesto & Pastore, Francesco, 2015. "Overeducation: A Disease of the School-to-Work Transition System," IZA Discussion Papers 9049, Institute for the Study of Labor (IZA).
    14. Kracke, Nancy & Reichelt, Malte & Vicari, Basha, 2017. "Wage losses due to overqualification: The role of formal degrees and occupational skills," IAB Discussion Paper 201710, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    15. Inmaculada García-Mainar & Victor M. Montuenga-Gómez, 2017. "Over-qualification and dimensions of job satisfaction," Documentos de Trabajo dt2017-05, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza.

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