Job mismatches and career mobility

Le Wen and Sholeh Maani ()

Applied Economics, 2019, vol. 51, issue 10, 1010-1024

Abstract: Does over-education assist or hinder occupational advancement? Career mobility theory hypothesizes that over-education leads to a higher level of occupational advancement and wage growth over time, with mixed international empirical evidence. This paper re-tests career mobility theory directly using a rich Australian longitudinal data set. A dynamic random effects probit model is employed to examine upward occupational mobility, considering two-digit occupational rank advancement and wage growth over three-year intervals. The ‘Household, Income and Labour Dynamics in Australia’ data across nine years are employed, and a Mundlak correction model is adopted to adjust for unobserved heterogeneity effects and potential endogeneity, both of which are important to over-education analysis. Contrary to career theory, the results point to job mismatch as an economic concern rather than a passing phase, regardless of whether or not workers are skill-matched. Results further show the importance of adjusting for endogeneity.

Date: 2019
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Working Paper: Job Mismatches and Career Mobility (2018)
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DOI: 10.1080/00036846.2018.1524569

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