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The Impact of Educational Mismatch on Firm Productivity: Evidence from Linked Panel Data

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  • Kampelmann, Stephan

    () (Free University of Brussels)

  • Rycx, Francois

    () (Free University of Brussels)

Abstract

We provide first evidence regarding the direct impact of educational mismatch on firm productivity. To do so, we rely on representative linked employer-employee panel data for Belgium covering the period 1999-2006. Controlling for simultaneity issues, time-invariant unobserved workplace characteristics, cohort effects and dynamics in the adjustment process of productivity, we find that: i) a higher level of required education exerts a significantly positive influence on firm productivity, ii) additional years of over-education (both among young and older workers) are beneficial for firm productivity, and iii) additional years of under-education (among young workers) are detrimental for firm productivity.

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  • Kampelmann, Stephan & Rycx, Francois, 2012. "The Impact of Educational Mismatch on Firm Productivity: Evidence from Linked Panel Data," IZA Discussion Papers 7093, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp7093
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    Cited by:

    1. Inmaculada García-Mainar & Víctor M. Montuenga-Gómez, 2017. "Subjective educational mismatch and signalling in Spain," Documentos de Trabajo dt2017-03, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza.
    2. Peter Cappelli, 2014. "Skill Gaps, Skill Shortages and Skill Mismatches: Evidence for the US," NBER Working Papers 20382, National Bureau of Economic Research, Inc.
    3. Kampelmann, Stephan & Mahy, Benoît & Rycx, Francois & Vermeylen, Guillaume, 2016. "Who Is Your Perfect Match? Educational Norms, Educational Mismatch and Firm Profitability," IZA Discussion Papers 10399, Institute for the Study of Labor (IZA).
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    5. McGuinness Seamus & Whelan Adele & Bergin Adele, 2016. "Is There a Role for Higher Education Institutions in Improving the Quality of First Employment?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(4), pages 1-15, October.
    6. Sattinger, Michael & Hartog, Joop, 2013. "Nash bargaining and the wage consequences of educational mismatches," Labour Economics, Elsevier, vol. 23(C), pages 50-56.
    7. François Rycx & Yves Saks & Ilan Tojerow, 2015. "Does Education Raise Productivity and Wages Equally? The Moderating Roles of Age, Gender and Industry," Working Paper Research 281, National Bank of Belgium.
    8. Philipp Grunau, 2016. "The impact of overeducated and undereducated workers on establishment-level productivity: First evidence for Germany," International Journal of Manpower, Emerald Group Publishing, vol. 37(2), pages 372-392, May.
    9. Barbara Ermini & Luca Papi & Francesca Scaturro, 2016. "Over-education among italian Ph.D. graduates. Does the crisis make a difference?," Mo.Fi.R. Working Papers 126, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    10. Seamus McGuinness & Luis Ortiz, 2016. "Skill gaps in the workplace: measurement, determinants and impacts," Industrial Relations Journal, Wiley Blackwell, vol. 47(3), pages 253-278, May.
    11. 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.
    12. Peter J. Sloane, 2014. "Overeducation, skill mismatches, and labor market outcomes for college graduates," IZA World of Labor, Institute for the Study of Labor (IZA), pages 1-88, November.
    13. Halvarsson, Daniel & Tingvall, Patrik, 2017. "The Impact of Employing Mismatched Workers on Firm Productivity, Wages and Profits," Ratio Working Papers 291, The Ratio Institute.
    14. R. Giuliano & B. Mahy & F. Rycx & G. Vermeylen, 2017. "Does corporate social responsibility make over-educated workers more productive?," Applied Economics, Taylor & Francis Journals, vol. 49(6), pages 587-605, February.
    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. Berlingieri, Francesco, 2017. "Local labor market size and qualification mismatch," ZEW Discussion Papers 17-055, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    17. 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.
    18. Eichhorst, Werner & Colussi, Tommaso & Guzi, Martin & Kahanec, Martin & Lichter, Andreas & Nikolova, Milena & Sommer, Eric, 2017. "Report No. 74: People to Jobs, Jobs to People: Global Mobility and Labor Migration," IZA Research Reports 74, Institute for the Study of Labor (IZA).
    19. Strauss, Jack, 2013. "The Economic Gains to Colorado of Amendment 66," MPRA Paper 49928, University Library of Munich, Germany.
    20. Barbara Ermini & Luca Papi & Francesca Scaturro, 2017. "Over education and the great recession. The case of italian PH.D graduates," Working Papers 420, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    21. Agnieszka Chlon-Dominczak & Andrzej Zurawski, 2017. "Measuring skills mismatches revisited – introducing sectoral approach," IBS Working Papers 03/2017, Instytut Badan Strukturalnych.
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    23. 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.
    24. Verhaest, Dieter & Bogaert, Elene & Dereymaeker, Jeroen & Mestdagh, Laura & Baert, Stijn, 2016. "Crowding Out in the Labour Market: Do Employers Lend a Hand?," IZA Discussion Papers 9654, Institute for the Study of Labor (IZA).

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    Keywords

    linked panel data; productivity; educational mismatch; GMM;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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