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Decomposing the Impacts of Overeducation and Overskilling on Earnings and Job Satisfaction: An Analysis Using REFLEX data

  • Sánchez-Sánchez, Nuria
  • McGuinness, Seamus

This paper uses the REFLEX dataset to test the hypothesis that the generally observed negative impacts of overeducation and overskilling on both job satisfaction and earnings can be attributed to under-utilisation in specific job related skills. We find that the penalties to both forms of mismatch are insensitive to the inclusion of controls for overskilling in a wide range of job specific competencies. The research suggests that the problem of mismatch relates to an inability for fully utilise general or innate ability as opposed to specific areas of acquired learning. The analysis suggests the problem of mismatch can only be effectively addressed by raising general levels of job quality within economies and this, in turn, presents serious challenges for policy.

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Paper provided by Economic and Social Research Institute (ESRI) in its series Papers with number WP393.

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Date of creation: Jul 2011
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Handle: RePEc:esr:wpaper:wp393
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  1. Arnaud Chevalier & Joanne Lindley, 2007. "Over-education and the skills of UK graduates," LSE Research Online Documents on Economics 19397, London School of Economics and Political Science, LSE Library.
  2. 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, 03.
  3. Séamus McGuinness, 2006. "Overeducation in the Labour Market," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 387-418, 07.
  4. McGuinness, Seamus & Sloane, Peter J., 2009. "Labour Market Mismatch Among UK Graduates: An Analysis Using REFLEX Data," IZA Discussion Papers 4168, Institute for the Study of Labor (IZA).
  5. Allen J.P. & Velden R.K.W. van der & Badillo-Amador L., 2013. "Wage effects of job-worker mismatches: Heterogeneous skills or institutional effects?," ROA Research Memorandum 021, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  6. Sicherman, Nachum & Galor, Oded, 1990. "A Theory of Career Mobility," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 169-92, February.
  7. Kostas Mavromaras & Seamus McGuinness & Mark Wooden, 2007. "Overskilling in the Australian Labour Market," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 40(3), pages 307-312, 09.
  8. McGuinness, Seamus & Wooden, Mark, 2007. "Overskilling, Job Insecurity and Career Mobility," IZA Discussion Papers 2938, Institute for the Study of Labor (IZA).
  9. Battu, H. & Belfield, C. R. & Sloane, P. J., . "Overeducation Among Graduates: A Cohort View," Working Papers 98-03, Department of Economics, University of Aberdeen.
  10. Bauer, Thomas K., 2002. "Educational mismatch and wages: a panel analysis," Economics of Education Review, Elsevier, vol. 21(3), pages 221-229, June.
  11. Elish Kelly & Philip O'Connell & Emer Smyth, 2008. "The Economic Returns to Field of Study and Competencies Among Higher Education Graduates in Ireland," Papers WP242, Economic and Social Research Institute (ESRI).
  12. Mary Silles & Peter Dolton, 2002. "The Effects of Over-Education on Earnings in the Graduate Labour Market," Economics Series Working Papers 126, University of Oxford, Department of Economics.
  13. Francis Green & Steven McIntosh, 2007. "Is there a genuine under-utilization of skills amongst the over-qualified?," Applied Economics, Taylor & Francis Journals, vol. 39(4), pages 427-439.
  14. Grazier, Suzanne & O'Leary, Nigel C. & Sloane, Peter J., 2008. "Graduate Employment in the UK: An Application of the Gottschalk-Hansen Model," IZA Discussion Papers 3618, Institute for the Study of Labor (IZA).
  15. Francis Green & Yu Zhu, 2010. "Overqualification, job dissatisfaction, and increasing dispersion in the returns to graduate education," Oxford Economic Papers, Oxford University Press, vol. 62(4), pages 740-763, October.
  16. Dolton, Peter & Vignoles, Anna, 2000. "The incidence and effects of overeducation in the U.K. graduate labour market," Economics of Education Review, Elsevier, vol. 19(2), pages 179-198, April.
  17. Seamus McGuinness, 2007. "How biased are the estimated wage impacts of overeducation? A propensity score matching approach," Applied Economics Letters, Taylor & Francis Journals, vol. 15(2), pages 145-149.
  18. S. Mcguinness, 2003. "Graduate overeducation as a sheepskin effect: evidence from Northern Ireland," Applied Economics, Taylor & Francis Journals, vol. 35(5), pages 597-608.
  19. Arnaud Chevalier, 2003. "Measuring Over-education," Economica, London School of Economics and Political Science, vol. 70(279), pages 509-531, 08.
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