Effects, Dynamics and Routes Out of Overqualification in Europe: A Comprehensive Analysis Distinguishing by Employment Status

Abstract

This study aims to improve our understanding of overqualification by incorporating distinctions in employment status (i.e., self-employed workers, private employees and public employees) in the analysis of the effects, dynamics and routes out of overqualification. To this end, we apply discrete choice – ordered and non-ordered – and count models to the data obtained from the European Community Household Panel for the EU-15. Our results indicate that overqualification decreases job satisfaction and increases on-the-job search, absenteeism and labour mobility. Furthermore, this analysis suggests that overqualification is a permanent phenomenon and demonstrates that successful routes out of overqualification vary by individual employment status. The implications of these results for education and labour market policies are also discussed.

Keywords: overqualification, job mismatch, self-employment, private paid employment, public paid employment, public intervention, EU-15

JEL Classification: I25, I28, J24, J28, O52