Assessing the Incidence and Wage Effects of Over-Skilling in the Australian Labour Market

35 Pages Posted: 7 Jul 2007

See all articles by Kostas G. Mavromaras

Kostas G. Mavromaras

University of Melbourne - Melbourne Institute: Applied Economic & Social Research; IZA Institute of Labor Economics

Séamus McGuinness

University of Melbourne - Melbourne Institute: Applied Economic & Social Research

Yin King Fok

University of Melbourne; University of Melbourne - Melbourne Institute: Applied Economic & Social Research

Date Written: June 2007

Abstract

This paper examines the incidence and wage effects of over-skilling within the Australian labour market. It finds that approximately 30 percent of employees believed themselves to be moderately over-skilled and 11 percent believed themselves to be severely over-skilled. The incidence of skills mismatch varied little when the sample was split by education. After controlling for individual and job characteristics as well as the potential bias arising from individual unobserved heterogeneity, severely over-skilled workers suffer an average wage penalty of 13.3 percent with the penalty ranging from about 8 percent among vocationally qualified employees to over 20 percent for graduates.

Keywords: skills, education

JEL Classification: J24, J31

Suggested Citation

Mavromaras, Kostas G. and McGuinness, Séamus and Fok, Yin King, Assessing the Incidence and Wage Effects of Over-Skilling in the Australian Labour Market (June 2007). IZA Discussion Paper No. 2837, Available at SSRN: https://ssrn.com/abstract=997873 or http://dx.doi.org/10.2139/ssrn.997873

Kostas G. Mavromaras (Contact Author)

University of Melbourne - Melbourne Institute: Applied Economic & Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Séamus McGuinness

University of Melbourne - Melbourne Institute: Applied Economic & Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia
+61 3 8344 2102 (Phone)
+61 3 8344 2111 (Fax)

HOME PAGE: http://melbourneinstitute.com/people/smcguinness/home.html

Yin King Fok

University of Melbourne ( email )

185 Pelham Street
Carlton, Victoria 3053
Australia

University of Melbourne - Melbourne Institute: Applied Economic & Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
63
Abstract Views
1,077
Rank
684,884
PlumX Metrics