Job Mismatches and Labour Market Outcomes: Panel Evidence on University Graduates

Abstract

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.

Is There a Role for Higher Education Institutions in Improving the Quality of First Employment?

“…Research to date suggests that the impacts of mismatch on labour market outcomes, such as earnings and job satisfaction, tend to vary according to the form of mismatch experienced. Over-education tends to be associated with a larger earning disadvantage but a lower job satisfaction deficit relative to over-skilling only, while, severely mismatched workers tend to experience both low earnings and job satisfaction levels relative to the being overeducated or over-skilled only (Mavromaras et al, 2013). In terms of both marginal effects and significance levels, some differential patterns are observed.…”

“…The literature has shown that both the determinants and impacts of labour market mismatch vary according to the type and severity experienced (Mavromaras et al, 2013), so we explore relationships with respect to four specific forms of mismatch. We classified graduate occupational mismatch into: 1) any form of mismatch 2) over-educated only, 3) over-skilled only, and 4) severely mismatched (both over-educated and over-skilled).…”

Temporary contracts: effect on job satisfaction and personal lives of recent PhD graduates

“…Many different factors can affect job satisfaction. An important one is the level of the job: a skill mismatch negatively influences job satisfaction (Allen and van der Velden 2001;Mavromaras et al 2010). The type of employment also plays a role: in a metaanalysis Wilkin (2013) showed that non-permanent employment decreases job satisfaction.…”

“…Although some studies do not find a negative effect of overeducation on job satisfaction (e.g., García-Espejo and Ibáñez 2006), other studies do (Hersch 1991). This effect has been found to be mediated by a skill mismatch rather than an educational mismatch (Allen and van der Velden 2001; Mavromaras et al 2010). However, as educational level is a more straightforward measure we chose this variable.…”

Overeducation, Skills and Wage Penalty: Evidence for Spain Using PIAAC Data

“…Following the specification developed by Verdugo and Verdugo (1989), different studies have included dummy variables for both educational and skill mismatch in the empirical analysis (Allen and van der Velden, 2001;Di Pietro and Urwin, 2006;Green and McIntosh, 2007;Sánchez-Sánchez and McGuiness, 2013;Mavromaras et al 2013). It has been found that overeducation and overskilling have both a negative and statistically significant effect on earnings within the same level of education, the overeducation effect being much higher than the overskilling effect.…”