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Article
Publication date: 9 August 2013

Lourdes Badillo‐Amador and Luis E. Vila

This paper aims to highlight the relevance of examining education and skill job‐worker mismatches as two different, although simultaneous, phenomena of the labor market…

Abstract

Purpose

This paper aims to highlight the relevance of examining education and skill job‐worker mismatches as two different, although simultaneous, phenomena of the labor market. Most previous literature does not take into account skill mismatch, and a number of papers deal with both kinds of mismatches as equivalent.

Design/methodology/approach

Spanish data from the European Community Household Panel (ECHP) survey for the year 2001 are used to examine the degree of statistical association between both education and skill mismatches, and to estimate wage equations as well as job satisfaction equations, considering satisfaction with pay, with the type of job and overall job satisfaction, in order to analyze the consequences of both types of mismatches from the workers’ viewpoint.

Findings

The statistical analysis shows that education and skill mismatches are weakly related in the Spanish labor market. The econometric analysis reveals that skill mismatches appear as key determinants of workers’ job satisfaction, while education mismatches have much weaker impacts, if any, on workers’ job satisfaction; however, both skill and education mismatches have negative impacts on wages.

Practical implications

The analysis points out that the research strategy that considers education mismatch as a proxy for the study of the effects of skill mismatch is rather weak because skill and education mismatches appear to capture different aspects of the accuracy of the job‐worker pairing, and, therefore, they have separate consequences for workers, both in monetary and non‐monetary terms. Skill mismatches are perceived by workers as a much more relevant problem than education mismatches. The wage and job satisfaction consequences of skill mismatches are strongly negative; to the contrary, education mismatches show much weaker effects.

Originality/value

The paper emphasizes that neglecting the effects of skill mismatch along with those of education mismatch in the analysis of the monetary and non‐monetary consequences of inadequate job‐worker pairing can lead to erroneous interpretations of the facts.

Details

International Journal of Manpower, vol. 34 no. 5
Type: Research Article
ISSN: 0143-7720

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Article
Publication date: 6 June 2016

Marco Pecoraro

The purpose of this paper is to propose an improved concept of educational mismatch that combines a statistical measure of over- and undereducation with the worker’s…

Abstract

Purpose

The purpose of this paper is to propose an improved concept of educational mismatch that combines a statistical measure of over- and undereducation with the worker’s self-assessment of skill utilization. The novelty of this measurement approach consists in identifying the vertical and horizontal nature of skills mismatch, that is, a mismatch in which skills are either over/underutilized or not utilized.

Design/methodology/approach

Cross-sectional data from the Swiss Household Panel survey for the years 1999 and 2004 are used to determine the true extent of educational mismatch among workers. Moroever, different versions of the Duncan and Hoffman wage equation are estimated depending on whether basic or alternative measures of educational mismatch are included.

Findings

The empirical analyses provide the following results: first, at least two-third of the statistically defined overeducated workers perceive their skills as adequate for the job they hold and are then apparently overeducated; second, overeducated workers whose skills are not related to the job do not receive any payoff to years of surplus education; and third, apparently overeducated workers have similar wage returns compared to others with the same schooling level but who are statistically matched. All in all, these findings confirm that most of those overeducated according to the statistical measure have unobserved skills that allow them to work in a job for which they are well-matched.

Originality/value

The paper indicates the need to consider both vertical and horizontal skill mismatches when measuring educational mismatch in the labour market. In that way, it is possible to account for worker heterogeneity in skills whose omission may generate biased estimates of the incidence and wage effects of over- and undereducation.

Details

International Journal of Manpower, vol. 37 no. 3
Type: Research Article
ISSN: 0143-7720

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Book part
Publication date: 11 May 2017

Müge Adalet McGowan and Dan Andrews

This paper explores the link between skill and qualification mismatch and labor productivity using cross-country industry data for 19 OECD countries. Utilizing mismatch

Abstract

This paper explores the link between skill and qualification mismatch and labor productivity using cross-country industry data for 19 OECD countries. Utilizing mismatch indicators aggregated from micro-data sourced from the recent OECD Survey of Adult Skills (PIAAC), the main results suggest that higher skill and qualification mismatch is associated with lower labor productivity, with over-skilling and under-qualification accounting for most of these impacts. A novel result is that higher skill mismatch is associated with lower labor productivity through a less efficient allocation of resources, presumably because when the share of over-skilled workers is higher, more productive firms find it more difficult to attract skilled labor and gain market shares at the expense of less productive firms. At the same time, a higher share of under-qualified workers is associated with both lower allocative efficiency and within-firm productivity – that is, a lower ratio of high productivity to low productivity firms. While differences in managerial quality can potentially account for the relationship between mismatch and within-firm productivity, the paper offers some preliminary insights into the policy factors that might explain the link between skill mismatch and resource allocation.

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Article
Publication date: 5 March 2018

Lucía Mateos Romero and Maria del Mar Salinas-Jiménez

The purpose of this paper is to analyze the effects of labor mismatches on wages and on job satisfaction for the Spanish case, with a distinction been made between…

Abstract

Purpose

The purpose of this paper is to analyze the effects of labor mismatches on wages and on job satisfaction for the Spanish case, with a distinction been made between educational and skills-related measures of mismatch.

Design/methodology/approach

The focus is placed on the usage that the individuals do of their skills in the workplace and different measures of skills use are considered to check the robustness of the results.

Findings

Using data from PIAAC, the results suggest that whereas educational mismatch shows greater effects on wages, the effects of labor mismatch on job satisfaction are better explained by the relative use of individual skills in the workplace.

Research limitations/implications

Both educational and skills mismatches are relevant for understanding the economic effects of labor mismatch. Nevertheless, it should be taken into account that educational mismatch is not an accurate proxy for skills mismatch, mainly when the non-monetary effects of labor mismatch are addressed.

Practical implications

There is room to increase workers’ skills utilization in the workplace, which, in turn, would contribute to enhance individual job satisfaction and, consequently, workers productivity.

Social implications

A process of upgrading in the Spanish labor market would allow to take full advantage of recent investments in education and skills formation done in the country in the last decades.

Originality/value

This study contributes to the literature on labor mismatch by explicitly considering that educational and skills mismatch might reflect different phenomena and by analyzing the effects of both types of mismatches on different labor market outcomes.

Details

Personnel Review, vol. 47 no. 2
Type: Research Article
ISSN: 0048-3486

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Article
Publication date: 14 May 2019

Ghassan Dibeh, Ali Fakih and Walid Marrouch

Employment and skill mismatch among youth constitute a major obstacle for access to the job market in the Middle East and North African region. The purpose of this paper…

Abstract

Purpose

Employment and skill mismatch among youth constitute a major obstacle for access to the job market in the Middle East and North African region. The purpose of this paper is to explore factors explaining employment and the perception of the skill-mismatch problem among the youth in Lebanon using a novel data set covering young people aged from 15 to 29. The paper provides a set of empirical insights that help in the design of public policy targeting school-to-work transition.

Design/methodology/approach

The authors control for a rich set of youth and household characteristics to jointly estimate the probability of being employed and the likelihood of reporting a skill-mismatch problem. The empirical analysis uses a bivariate probit model where the first equation estimates the employment status while the second estimates the determinants of skill-mismatch perceptions. The bivariate probit model considers the error terms in both equations to be correlated and the model tests for such a correlation. The authors estimate the model recursively by controlling for the employment dummy variable in the skill-mismatch equation since employed youth could be more or less likely to perceive the skill mismatch. The estimation is conducted first over the whole sample of youth, and then it is implemented by gender and region.

Findings

The authors find that youth employment is mainly correlated with age, being male, being single, having received vocational training and financial support from parents, living with parents and receiving current education. The skill-mismatch perceptions are mainly driven by being male, being single, having received post-secondary education and belonging to upper and middle social classes. The authors also find that employability level and skill-mismatch problems are jointly determined in the labor market for males and in the core region only.

Originality/value

The paper covers a country that is neglected in the literature on the employment-skill mismatch nexus in the context of school-to-work transition. The study also uses a novel data set focusing on youth. The paper contributes to our understanding of the school-to-work transition in particular and to the youth-to-adulthood transition in general.

Details

International Journal of Manpower, vol. 40 no. 8
Type: Research Article
ISSN: 0143-7720

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Book part
Publication date: 11 May 2017

Rolf van der Velden and Dieter Verhaest

The explicit assumption in most literature on educational and skill mismatches is that these mismatches are inherently costly for workers. However, the results in the…

Abstract

The explicit assumption in most literature on educational and skill mismatches is that these mismatches are inherently costly for workers. However, the results in the literature on the effects of underqualification or underskilling on wages and job satisfaction only partly support this hypothesis. Rather than assuming that both skill surpluses and skill deficits are inherently costly for workers, we interpret these mixed findings by taking a learning perspective on skill mismatches. Following the theory of Vygotski on the so-called “zone of proximal development,” we expect that workers who start their job with a small skill deficit, show more skill growth than workers who start in a matching job or workers with a more severe skill deficit. We test this hypothesis using the Cedefop European skills and jobs survey (ESJS) and the results confirm these expectations. Workers learn more from job tasks that are more demanding than if they would work in a job that perfectly matches their initial skill level and this skill growth is largest for those who start with a small skill deficit. The learning opportunities are worst when workers start in a job for which they have a skill surplus. This is reflected in the type of learning activities that workers take up. Workers with a small skill deficit are more often engaged in informal learning activities. Finally, workers who started with a small skill deficit are no less satisfied with their job than workers who started in a well-matched job. We conclude that a skill match is good for workers, but a small skill deficit is even better. This puts some responsibility on employers to keep job tasks and responsibilities at a challenging level for their employees.

Details

Skill Mismatch in Labor Markets
Type: Book
ISBN: 978-1-78714-377-7

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Book part
Publication date: 25 March 2021

Léon Consearo

Purpose: This chapter aims to analyse the current literature on the supply and demand for skills in the UK labour market to identify key trends and themes around skill

Abstract

Purpose: This chapter aims to analyse the current literature on the supply and demand for skills in the UK labour market to identify key trends and themes around skill mismatch, identify gaps and areas for future research.

Method: Selected articles were analysed to identify key themes and trends in the existing literature.

Findings: The overall finding is that the UK labour market suffers from various forms of widespread skill mismatch, but most particularly in the form of skill shortage. The areas with the most notable skill shortage highlighted in the literature include basic literacy, numeracy and digital; employability including leadership and management; STEM and health-related areas; teaching and training and a range of higher-level skills (including leadership and management, digital and creative, and industry-specific skills in STEM and health-related sectors, financial and business services, technology media and telecommunications, as well as teaching and training). Skill mismatch in the form of skill shortages in these areas is projected to worsen considerably by 2030, with some areas expected to suffer acute shortages by this time. Continued improvements to the education system will help to ensure the pipeline of future workers. However, changes to the education system are unlikely to impact on 80% of the future 2030 workforce who are already working and active in the UK labour market.

Originality/value of paper: The chapter provides a review of key literature in the field and aggregates key findings, so a wider picture of the extent and nature of the UK's skill mismatch challenge can be appreciated.

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Book part
Publication date: 11 May 2017

Maria Ferreira, Annemarie Künn-Nelen and Andries De Grip

This paper provides more insight into the assumption of human capital theory that the productivity of job-related training is driven by the improvement of workers’ skills

Abstract

This paper provides more insight into the assumption of human capital theory that the productivity of job-related training is driven by the improvement of workers’ skills. We analyze the extent to which training and informal learning on the job are related to employee skill development and consider the heterogeneity of this relationship with respect to workers’ skill mismatch at job entry. Using data from the 2014 European Skills and Jobs Survey, we find – as assumed by human capital theory – that employees who participated in training or informal learning show greater improvement of their skills than those who did not. The contribution of informal learning to employee skill development appears to be larger than that of training participation. Nevertheless, both forms of learning are shown to be complementary. This complementarity between training and informal learning is related to a significant additional improvement of workers’ skills. The skill development of workers who were initially underskilled for their job seems to benefit the most from both training and informal learning, whereas the skill development of those who were initially overskilled benefits the least. Work-related learning investments in the latter group seem to be more functional in offsetting skill depreciation than in fostering skill accumulation.

Details

Skill Mismatch in Labor Markets
Type: Book
ISBN: 978-1-78714-377-7

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Article
Publication date: 4 May 2012

Gian Carlo Cainarca and Francesca Sgobbi

The purpose of this paper is to estimate the incidence of educational mismatch in Italy and the return to investment in education, controlling for employees’ ability…

Abstract

Purpose

The purpose of this paper is to estimate the incidence of educational mismatch in Italy and the return to investment in education, controlling for employees’ ability. Contrary to most existing studies, the heterogeneity of individual performance is measured directly through the assessment of required and provided skills.

Design/methodology/approach

Based on original data including over 3,600 face‐to‐face interviews, this paper appraises the incidence of self‐assessed educational mismatch in the Italian private sector and estimates wage models of the economic returns to educational mismatch, skill requirements and provided skills.

Findings

In Italy, under‐educated employees outnumber over‐educated ones and returns to required education and over‐education are lower than in other industrialised countries. Individual heterogeneous ability, as captured by individual skills, is a significant determinant of wage, although the inclusion of direct measures of required and provided skills does not substantially affect the estimated coefficients of the return to investment in education.

Practical implications

The omission of controls for the heterogeneous ability of employees biases the results of traditional ordinary least squares (OLS) estimates of wage models. However, the bias may be small enough to make simple OLS estimates on existing cross‐sectional data an acceptable compromise to provide policy makers with reasonably accurate and up‐to‐date information.

Originality/value

The paper provides a direct appreciation of individual heterogeneity that other studies can capture only through sophisticated indirect econometric techniques. In addition, the paper extends the set of available cross‐country comparisons by estimating the educational mismatch and the returns to educational and skill mismatches in the overall Italian private labour market.

Details

International Journal of Manpower, vol. 33 no. 2
Type: Research Article
ISSN: 0143-7720

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Article
Publication date: 12 June 2017

Piriya Pholphirul

Educational mismatches constitute negative impacts on labor markets in most countries, Thailand is no exception. The purpose of this paper is to quantify the degree of…

Abstract

Purpose

Educational mismatches constitute negative impacts on labor markets in most countries, Thailand is no exception. The purpose of this paper is to quantify the degree of educational mismatch in Thailand and its impacts on labor market outcomes.

Design/methodology/approach

This study analyzes data obtained from Thailand’s Labor Force Survey to estimate the likelihood of horizontal and vertical mismatches and their impacts on labor market outcomes.

Findings

Estimation results reveal the existence of a high level of both vertical and horizontal mismatches in the labor market. The vertical mismatch tends to be most prevalent in the case of graduates with degrees in the social sciences, while the existence of the horizontal mismatch is mostly found in the case of graduates with backgrounds in the physical sciences. Samples with a degree in health science seem to be least impacted by both types of mismatch. Education-job mismatches, either vertical or horizontal mismatches, are found to cause negative impacts on workers’ employment. Findings indicate that workers who encountered either horizontal or vertical educational mismatches tended to have lower monthly incomes than did those without such mismatches. Vertical mismatches seemed to result in lower incomes than did the horizontal mismatches. Furthermore, both types of mismatch are found to not have any significant impact on workers’ employability.

Research limitations/implications

Nevertheless, due to different types of mismatches such as skill mismatch or personality mismatch, this paper only quantifies degree mismatch on the context of Thailand only. Nevertheless, different structure of labor market can show different findings.

Practical implications

Both horizontal mismatch and vertical mismatch can be mitigated with strong collaboration system between colleges/universities and employers. Therefore, the government should further promote better cooperation between universities and the private sector (industry-university linkages) by encouraging more exchanges between high-level executives and students of the private sector and higher-education institutes. More opportunities for students to practice their skills in real workplace settings should be provided, and students should also be able to gain credits from participating in such training. In Thailand, at present there are only a few degree programs that require students to complete an internship.

Social implications

As for social policy recommendations, to reduce both horizontal and vertical mismatches in practices, it is essential that the education sector promote a life-long learning framework that allows workers whose jobs do not match their educational background (or with their educational attainment) to receive the training and develop the skills required by employers.

Originality/value

Comparing to other literature in these areas in which survey data from the authors are relied, this paper, however, uses the Thai Labor Force Survey, which is the national representative sample data set. The results found from this paper are therefore useful to be reliable on implying appropriated policy recommendations.

Details

Education + Training, vol. 59 no. 5
Type: Research Article
ISSN: 0040-0912

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