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Overskilling Dynamics and Education Pathways

Kostas Mavromaras, Seamus McGuinness () and King Fok

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

Abstract: This paper uses panel data and econometric methods to estimate the incidence and the dynamic properties of overskilling among employed individuals. The paper begins by asking whether there is extensive overskilling in the labour market, and whether overskilling differs by education pathway. The answer to both questions is yes. The paper continues by asking whether overskilling is a self-perpetuating labour market state (state dependence), and whether state dependence differs by education pathway. The paper uses a dynamic random effects probit which includes Mundlak corrections and it models the initial conditions following Heckman's method. It finds that there is extensive overskilling state dependence in the workplace, and to the degree that overskilling can be interpreted as skills underutilisation and worker-job mismatch, this is an important finding. Overskilled workers with a higher degree show the highest state dependence, while workers with vocational education show none. Workers with no post-school qualifications are somewhere between these two groups. The finding that higher degree graduates suffer the greatest overskilling state dependence, combined with the well-established finding that they also suffer the highest overskilling wage penalty, offers an additional useful perspective to compare the attributes of vocational and degree qualifications.

Keywords: Overskilling; education pathways; state dependence; dynamic estimation (search for similar items in EconPapers)
JEL-codes: J24 J31 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2009-07
New Economics Papers: this item is included in nep-edu, nep-hrm and nep-lab
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http://melbourneinstitute.unimelb.edu.au/downloads ... series/wp2009n22.pdf (application/pdf)

Related works:
Journal Article: Overskilling dynamics and education pathways (2012) Downloads
Working Paper: Overskilling Dynamics and Education Pathways (2009) Downloads
Working Paper: Overskilling Dynamics and Education Pathways (2009) Downloads
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