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Job Mismatches and Career Mobility

Author

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  • Wen, Le

    () (University of Auckland)

  • Maani, Sholeh A.

    () (University of Auckland)

Abstract

Does over-education assist or hinder occupational advancement? Career mobility theory hypothesizes that over-education leads to a higher level of occupational advancement and wage growth over time, with mixed international empirical evidence. This paper re-tests career mobility theory directly using a rich Australian longitudinal data set. A dynamic random effects probit model is employed to examine upward occupational mobility, considering two-digit occupational rank advancement and wage growth over three-year intervals. The 'Household, Income and Labour Dynamics in Australia' data across nine years are employed, and a Mundlak correction model is adopted to adjust for unobserved heterogeneity effects and potential endogeneity, both of which are important to over-education analysis. Contrary to career theory, the results point to job mismatch as an economic concern rather than a passing phase, regardless of whether or not workers are skill-matched. Results further show the importance of adjusting for endogeneity.

Suggested Citation

  • Wen, Le & Maani, Sholeh A., 2018. "Job Mismatches and Career Mobility," IZA Discussion Papers 11844, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp11844
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    References listed on IDEAS

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    1. Allen, Jim & van der Velden, Rolf, 2001. "Educational Mismatches versus Skill Mismatches: Effects on Wages, Job Satisfaction, and On-the-Job Search," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 434-452, July.
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    3. Jeffrey M. Wooldridge, 2005. "Simple solutions to the initial conditions problem in dynamic, nonlinear panel data models with unobserved heterogeneity," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(1), pages 39-54.
    4. Kiker, B. F. & Santos, Maria C. & de Oliveira, M. Mendes, 1997. "Overeducation and undereducation: Evidence for Portugal," Economics of Education Review, Elsevier, vol. 16(2), pages 111-125, April.
    5. Kostas Mavromaras & Peter Sloane & Zhang Wei, 2012. "The role of education pathways in the relationship between job mismatch, wages and job satisfaction: a panel estimation approach," Education Economics, Taylor & Francis Journals, vol. 20(3), pages 303-321, February.
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    12. repec:taf:applec:v:49:y:2017:i:12:p:1226-1240 is not listed on IDEAS
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    More about this item

    Keywords

    labour market; over-education; over-skilling; career mobility; occupational mobility; wage growth;

    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
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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