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The Problem of Overskilling in Australia and Britain

Author

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  • Mavromaras, Kostas G.

    () (NILS, Flinders University)

  • McGuinness, Seamus

    () (Economic and Social Research Institute, Dublin)

  • O'Leary, Nigel C.

    () (Swansea University)

  • Sloane, Peter J.

    () (Swansea University)

  • Fok, Yin King

    () (Melbourne Institute of Applied Economic and Social Research)

Abstract

This paper examines the parallel trends in education and labour market developments in Australia and Britain. It uses unique information in the WERS and HILDA surveys on reported overskilling in the workplace. To a degree, the overskilling information overcomes the problem of unobserved ability differences and focuses on the actual job-employee mismatch more than the conventional overeducation variables can. The paper finds that the prevalence of overskilling decreases with education at least for Australia, but the wage penalty associated with overskilling increases with education. Although the general patterns of overskilling (prevalence and penalties) are fairly similar between Australia and Britain, the problem appears to be greater in Britain.

Suggested Citation

  • Mavromaras, Kostas G. & McGuinness, Seamus & O'Leary, Nigel C. & Sloane, Peter J. & Fok, Yin King, 2007. "The Problem of Overskilling in Australia and Britain," IZA Discussion Papers 3136, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp3136
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    References listed on IDEAS

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    1. Green, Francis & McIntosh, Steven & Vignoles, Anna, 2002. "The Utilization of Education and Skills: Evidence from Britain," Manchester School, University of Manchester, vol. 70(6), pages 792-811, December.
    2. Andries de Grip & Hans Bosma & Dick Willems & Martin van Boxtel, 2008. "Job-worker mismatch and cognitive decline," Oxford Economic Papers, Oxford University Press, vol. 60(2), pages 237-253, April.
    3. Geoff Mason, 1996. "Graduate Utilisation In British Industry: The Initial Impact Of Mass Higher Education," National Institute Economic Review, National Institute of Economic and Social Research, vol. 156(1), pages 93-103, May.
    4. 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.
    5. Sattinger, Michael, 1993. "Assignment Models of the Distribution of Earnings," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 831-880, June.
    6. H. Battu & C.R. Belfield & P.J. Sloane, 2000. "How Well Can We Measure Graduate Over- Education and Its Effects?," National Institute Economic Review, National Institute of Economic and Social Research, vol. 171(1), pages 82-93, January.
    7. Nigel C. O’Leary & Peter J. Sloane, 2005. "The Return to a University Education in Great Britain," National Institute Economic Review, National Institute of Economic and Social Research, vol. 193(1), pages 75-89, July.
    8. Chapman, Bruce & Ryan, Chris, 2005. "The access implications of income-contingent charges for higher education: lessons from Australia," Economics of Education Review, Elsevier, vol. 24(5), pages 491-512, October.
    9. 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.
    10. Giorgio Di Pietro & Peter Urwin, 2006. "Education and skills mismatch in the Italian graduate labour market," Applied Economics, Taylor & Francis Journals, vol. 38(1), pages 79-93.
    11. repec:sae:niesru:v:156:y::i:1:p:93-103 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Jones, Melanie K & Mavromaras, Kostas & Sloane, Peter J & Wei, Zhang (NILS), 2011. "NILS Working paper no 176. Disability and job mismatches in the Australian labour market," NILS Working Papers 26074, National Institute of Labour Studies.
    2. Elena Bárcena-Martín & Santiago Budría & Ana I. Moro-Egido, 2012. "Skill mismatches and wages among European university graduates," Applied Economics Letters, Taylor & Francis Journals, vol. 19(15), pages 1471-1475, October.
    3. Marco Pecoraro, 2014. "Is There Still a Wage Penalty for Being Overeducated But Well-matched in Skills? A Panel Data Analysis of a Swiss Graduate Cohort," LABOUR, CEIS, vol. 28(3), pages 309-337, September.
    4. Sergey Roshchin & Victor Rudakov, 2015. "Do Starting Salaries for Graduates Measure the Quality of Education? A Review of Studies by Russian and Foreign Authors," Educational Studies, Higher School of Economics, issue 1, pages 137-181.
    5. repec:spr:italej:v:3:y:2017:i:2:d:10.1007_s40797-017-0053-3 is not listed on IDEAS
    6. Zainizam Zakariya & Khoo Yin Yin, 2016. "Over- and Underskilling in the Malaysian Labour Market: Evidence from the 2003–2012 Labour Force Survey (LFS)," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 6(11), pages 203-223, November.
    7. Batyra, Anna & Sneessens, Henri R., 2010. "Selective reductions in labor taxation: Labor market adjustments and macroeconomic performance," Journal of Policy Modeling, Elsevier, vol. 32(4), pages 531-543, July.
    8. George Messinis, 2009. "Earnings and Languages in the Family: Second-Generation Australians," The Economic Record, The Economic Society of Australia, vol. 85(s1), pages 59-73, September.
    9. Roger Wilkins & Mark Wooden, 2014. "Two Decades of Change: The Australian Labour Market, 1993–2013," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 47(4), pages 417-431, December.
    10. Kostas Mavromaras & Peter Sloane & Zhang Wei, 2015. "The scarring effects of unemployment, low pay and skills under-utilization in Australia compared," Applied Economics, Taylor & Francis Journals, vol. 47(23), pages 2413-2429, May.
    11. Patrizia Ordine & Giuseppe Rose, 2011. "Educational Mismatch and Wait Unemployment," Working Papers 19, AlmaLaurea Inter-University Consortium.
    12. Albiol, Judit & Díaz Serrano, Lluís & Teruel, Mercedes, 2014. "Is Self-employment a Way to Escape from Skill Mismatches?," Working Papers 2072/247652, Universitat Rovira i Virgili, Department of Economics.
    13. McGuinness, Seamus & Byrne, Delma, 2014. "Examining the Relationships between Labour Market Mismatches, Earnings and Job Satisfaction among Immigrant Graduates in Europe," Papers WP484, Economic and Social Research Institute (ESRI).
    14. Benoît Mahy & François Rycx & Guillaume Vermeylen, 2015. "Educational Mismatch and Firm Productivity: Do Skills, Technology and Uncertainty Matter?," De Economist, Springer, vol. 163(2), pages 233-262, June.
    15. Agustí Segarra & Mercedes Teruel & Miquel Angel Bove, 2014. "A territorial approach to R&D subsidies: Empirical evidence for Catalonian firms," Working Papers XREAP2014-07, Xarxa de Referència en Economia Aplicada (XREAP), revised Sep 2014.
    16. Mavromaras, Kostas G. & Sloane, Peter J. & Wei, Zhang, 2011. "Disability and Job Mismatches in the Australian Labour Market," IZA Discussion Papers 6152, Institute for the Study of Labor (IZA).
    17. Albiol Sanchez, Judit & Diaz-Serrano, Luis & Teruel, Graciela, 2015. "Is Self-employment a Way to Escape from Skill Mismatches?," IZA Discussion Papers 9008, Institute for the Study of Labor (IZA).
    18. Antonio Di Paolo & Ferran Mañé, 2014. "“Are we wasting our talent? Overqualification and overskilling among PhD graduates”," IREA Working Papers 201426, University of Barcelona, Research Institute of Applied Economics, revised Oct 2014.
    19. repec:eee:labeco:v:48:y:2017:i:c:p:120-143 is not listed on IDEAS
    20. Maria Ferreira & Annemarie Künn-Nelen & Andries De Grip, 2017. "Work-Related Learning and Skill Development in Europe: Does Initial Skill Mismatch Matter?," Research in Labor Economics,in: Skill Mismatch in Labor Markets, volume 45, pages 345-407 Emerald Publishing Ltd.
    21. Bender, Keith A. & Roche, Kristen, 2013. "Educational mismatch and self-employment," Economics of Education Review, Elsevier, vol. 34(C), pages 85-95.
    22. Kostas Mavromaras & Stéphane Mahuteau & Peter Sloane & Zhang Wei, 2013. "The effect of overskilling dynamics on wages," Education Economics, Taylor & Francis Journals, vol. 21(3), pages 281-303, July.
    23. Seamus McGuinness & Delma Byrne, 2015. "Born abroad and educated here: examining the impacts of education and skill mismatch among immigrant graduates in Europe," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-30, December.
    24. Mavromaras, Kostas & McGuinness, Seamus, 2012. "Overskilling dynamics and education pathways," Economics of Education Review, Elsevier, vol. 31(5), pages 619-628.

    More about this item

    Keywords

    Australia; overeducation; overskilling; Britain;

    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

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