Decomposing the Impacts of Overeducation and Overskilling on Earnings and Job Satisfaction: an Analysis using REFLEX data

This article assesses the extent to which the impact of overeducation and overskilling on labour market outcomes such as earnings and job satisfaction relate to mismatches in particular competency areas. The analysis uses REFLEX data, which collects information about 19 key competence areas related to job performance. We find that the penalties to both forms of mismatch are insensitive to the inclusion of controls for overskilling in a wide range of job-specific competencies. The research suggests that the problem of mismatch relates to an inability to fully utilise general or innate ability as opposed to specific areas of acquired learning. We conclude that the problem of mismatch can only be effectively addressed by raising general levels of job quality within developed labour markets.