The Problem of Overskilling in Australia and Britain

Kostas Mavromaras, Seamus Mcguinness (), Nigel O’Leary, Peter James Sloane and Yin King Fok ()
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Nigel O’Leary: University of Swansea
Yin King Fok: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne

Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne

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 jobemployee 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.

Date: 2007-11
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Working Paper: The Problem of Overskilling in Australia and Britain (2007)
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