The interpretation of graduate mismatch manifested either as over-education or as over-skilling remains problematical. This article analyses the relationship of educational and skills mismatch with pay, job satisfaction and job mobility using unique data from the Household, Income and Labour Dynamics in Australia (HILDA) survey. Over-education and over-skilling are found to be distinct phenomena and their combination results in the most severe negative labour market outcomes. Using panel methodology reduces strongly the size of many relevant coefficients, questioning previous cross-sectional results in the literature. The article shows that the relationship between mismatch and labour market outcomes is strongly influenced by unobserved heterogeneity.

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. ABSTRACTThe Problem of Overskilling in Australia and Britain * 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.JEL Classification: J24, J31

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in Assessing the Incidence and Wage Effects of Over-Skilling in the Australian Labour Market Kostas Mavromaras Seamus McGuinness Yin King Fok D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.

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We investigate the impact of health on working hours. This is in recognition of the fact that leaving the labour market because of persistently low levels of health status, or because of new health shocks, is only one of the possible responses open to employees. We use the first six waves of the Household, Income and Labour Dynamics in Australia (HILDA) Survey to estimate the joint effect of health status and health shocks on working hours. To account for zero working hours, we use a dynamic random effects Tobit model of working hours. We follow Heckman (1981) and approximate the unknown initial conditions with a static equation that utilises information from the first wave of the data. Predicted individual health status is used to ameliorate the possible effects of measurement error and endogeneity. We conclude that overall, lower health status results in fewer working hours and that when they occur, health shocks lead to further reductions in working hours. Estimation results show that the model performs well in separating the time-persistent effect of health status and the potentially more transient health shocks on working hours.

Skill shortages are often portrayed as a major problem for advanced economies, yet there is surprisingly little empirical evidence about how firms adjust to skill shortages and their associated effects on firm performance. This paper provides new evidence from the Business Longitudinal Database, an Australian dataset with unusually rich information on the causes and consequences of skill shortages in small and medium-sized enterprises. We document the range of alternative strategies that firms adopt when responding to skill shortages, and show that certain types of adaptation are utilised in some cases and not in others, depending on the type of shortage encountered and other attributes of the firm. Further, we show that certain types of skill shortage are more likely to be long-lasting and difficult to resolve, while others are alleviated relatively quickly with minimal adjustment. Our findings yield lessons for the skill utilisation strategies of firms, and for the labour market policies of governments.

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