Job-education mismatch of young workers: the influence of local characteristics[Inadéquation emploi-diplôme en début de carrière : quelle influence du contexte local ?]

Overeducation, or job-education mismatch, is common among young workers entering the labour market: many individuals work in jobs requiring less education than they actually have. If the importance of individual factors has been extensively demonstrated in the literature, local characteristics of the labour market are also likely to play a role in the risk of being overeducated. In this paper, we study the determinants of young workers overeducation in the first part of their careers, to identify the influence of the local context on the phenomenon. We use data from the French population census for 2019 and estimate the effect of both individual and contextual variables, observed at the scale of the French local employment areas, on the probability of being overeducated. We show that, if individual variables are still the main drivers of mismatch, the characteristics of the area in which individuals work have an impact on their risk of overeducation. The risk of mismatch appears to be lower in more dynamic areas, with higher rates of firm creations and more job opportunities. Studying heterogeneity between areas using a spatial regimes model, we find that this influence is particularly significant in areas with large metropolitan areas and/or having a diversified economic activity. On the contrary, this effect almost completely disappears in areas with an agricultural or tourism specialisation. Furthermore, the role of individual determinants varies depending on the economic orientation of the areas. This is especially true regarding the educational level of individuals and business sector they work in.