Abstract
This paper provides new evidence on the changes in the level and persistence of occupational mismatch across countries by investigating whether differences among generations (cohorts) are at the core of these changes. Using data from the 1994–1998 International Adult Literacy Survey, the 2003–2008 Adult Literacy and Life Skills Survey, and the 2011–2012 OECD Survey of Adult Skills, we estimate an age–period–cohort model in three European countries to examine the extent to which younger cohorts face a greater (smaller) risk of being occupationally mismatched in their jobs than their older counterparts. Two definitions of occupational mismatch are used, focusing on both educational attainment and literacy skills. Results indicate that countries present different patterns in the evolution of occupational mismatch from older to younger generations according to the definition employed (overeducation or skills mismatch). Different macro-economic and educational contexts may be at the core of these results, suggesting that tailored policy responses are desirable for effectively addressing the occupational mismatch problem.
Similar content being viewed by others
Change history
07 February 2021
A Correction to this paper has been published: https://doi.org/10.1007/s11205-020-02538-x
Notes
For the European Union, see https://ec.europa.eu/education/policies/european-policy-cooperation/et2020-framework_en.
For Norway, see https://www.regjeringen.no/en/topics/european-policy/areas-cooperation/Education/id686144/.
An overeducated worker is an individual whose educational attainment exceeds the educational requirements of their workplace, whereas an overskilled worker is an individual whose skills and competences exceed those required to perform their job.
Further information about these Surveys can be found at:
https://nces.ed.gov/statprog/handbook/pdf/ials.pdf (for IALS Survey).
https://nces.ed.gov/surveys/all/ (for ALL Survey).
https://www.oecd.org/skills/piaac/ (for PIAAC Survey).
The USA and Canada also participated in all of the surveys, but we exclude them as the variable age is not reported as continuous in the original dataset, which does not allow us to build the right cohorts.
The Netherlands represents a peculiar situation as in some features, it resembles the Scandinavian regime.
ISCO 1-digit occupations have been used for the estimation of occupational mismatch variables. The ISCO 1-digit occupation divides jobs into ten major groups. Although a 2-digit or larger ISCO classification would have been preferred to reduce the heterogeneity in the entry requirements to the occupations included, this is not possible as ISCO 2-digit is only available in the PIAAC sample. Nonetheless, we conduct two checks using only PIAAC data, where the two classifications are available. First, we build two measures of overeducation using both the ISCO 1-digit and ISCO 2-digit classifications, and we estimate the correlation between these two, which is as high as 0.98. Second, we check how many individuals would have been classified as overeducated using one measure and not the other. In the PIAAC sample, only 6% of the working individuals do not overlap when using the two different measures. We believe that these two checks indicate that using the ISCO 1-digit or ISCO 2-digit categories to build the measure of overeducation is equivalent in this paper. Moreover, Mavromaras et al. (2010), McGuinness et al. (2018b) or Bar-Haim et al. (2019) also rely on ISCO 1-digit to calculate their overeducation variable providing results in line with other empirical evidence in this field, which reassures our approach. Nevertheless, it should be kept in mind that this does not refute the argument that there might still be a problem of heterogeneous requirements among the ten occupations used, being this issue probably more relevant in some countries than others. More information about using ISCO classifications and national features can be found at https://www.ilo.org/public/english/bureau/stat/isco/docs/publication08.pdf (last accessed September 2020).
Note that to guarantee sufficient variability to compute the indicators, the identification of matched and mismatched individuals is performed for each measure only when the number of sample observations on which the indicator is based is at least 20. This minimum threshold is a standard procedure in European surveys such as the European Union Statistics on Income and Living Conditions (EUSILC) and the Labour Force Survey (LFS).
The working sample is composed of currently working individuals. This may generate sample selection since being mismatched or unemployed may not be independent decisions. However, many of the papers studying overeducation simply focus on the working individuals and do not consider these sample selection issues (some examples are Bar-Haim et al. 2019; McGuinness et al. 2018b; McGuinness 2006; Mavromaras et al. 2010). We also follow this approach.
The corresponding nonlinear age and period effects are also simultaneously estimated.
Estimates are done in STATA using the APCD command.
Notice that the APCD method identifies deviations from the linear trends of age, period, and cohort: it can identify specific cohorts defined by higher/lower overeducation rates, but it cannot identify the actual linear trend.
OECD (2013), Education at a Glance 2013: OECD Indicators, OECD Publishing, Paris, https://dx.doi.org/10.1787/eag2013-en.
After having estimated the APCD, they implement post-estimation regression of the cohort APCD coefficients found in the model and regress them on variables that may explain those effects. They can do this because their analysis is based on 9 countries, for 12 cohorts, a much larger sample than the one available in our case which consisted of 3 countries, for 8 cohorts, making this analysis unfeasible.
New waves of PIAAC data with detailed information of occupations at ISCO 2-digit level will also allow having a more precise measure of occupational mismatch overcoming the current limitation of ISCO 1-digit being the only classification available with the existing data.
References
Acemoglu, D. (1998). Why do new technologies complement skills? Directed technical change and wage inequality. Quarterly Journal of Economics, 113, 1055–1089.
Alba-Ramírez, A. (1993). Mismatch in the Spanish labour market. Journal of Human Resources, 28(2), 259–278.
Baert, S., Cockx, B., & Verhaest, D. (2013). Overeducation at the start of the career: stepping stone or trap? Labour Economics, 25, 123–40.
Baran, J. (2019). Is expansion of overeducation cohort-driven? Evidence from Poland. Working Papers 2019–13, Faculty of Economic Sciences, University of Warsaw.
Bar-Haim, E., Chauvel, L., & Hartung, A. (2019). More necessary and less sufficient: an age-period-cohort approach to overeducation from a comparative perspective. Higher Education, 78, 479–499.
Barrett, G. and Riddel, W.G. (2016). Ageing and literacy skills: Evidence from IALS, ALL and PIAAC, IZA Discussion Paper No. 10017
Béduwé, C., & Planas, J. (2003). Educational expansion and labour market. Luxembourg: CEDEFOP-Office for Official Publications of the European Communities.
Bell, A., & Jones, K. (2015). Bayesian informative priors with Yang and land’s hierarchical age-period- cohort model. Quality and Quantity, 49(1), 255–266. https://doi.org/10.1007/s11135-013-9985-3.
Bell, A., & Jones, K. (2018). The hierarchical age-period-cohort model: Why does it find the results that it finds? Quality and Quantity, 52(2), 783–799. https://doi.org/10.1007/s11135-017-0488-5.
Bernardi, F., & Ballarino, G. (Eds.). (2016). Education, occupation and social origin: A comparative analysis of the transmission of socio-economic inequalities. Cheltenham: Edward Elgar Publishing.
Bianchi, N. (2020). The indirect effects of educational expansions: evidence from a large enrollment increase in university majors. Journal of Labor Economics, 30(3), 767–804.
Blanchard, R. D., Bunker, J. B., & Wachs, M. (1977). Distinguishing aging, period and cohort effects in longitudinal studies of elderly populations. Socio-Economic Planning Sciences, 11(3), 137–146.
Büchel, F., & Mertens, A. (2004). Overeducation, undereducation, and the theory of career mobility. Applied Economics, 35(8), 803–816.
Carstensen, B. (2007). Age–period–cohort models for the Lexis diagram. Statistics in Medicine, 26(15), 3018–3045.
CEDEFOP. (2010). The skill matching challenge: Analysing skill mismatch and policy implications. Luxembourg: Publications Office of the European Union.
Chancel, L. (2014). Are younger generations higher carbon emitters than their elders?: Inequalities, generations and CO2 emissions in France and in the USA. Ecological Economics, 100, 195–207.
Chauvel, L. (2013). Spécificité et permanence des effets de cohorte: le modèle APC-D appliqué aux inégalités de génération France US. Revue Francaise de Sociologie, 54(4), 665–707.
Chauvel, L., Leist, A. K., & Ponomarenko, V. (2016). Testing persistence of cohort effects in the epidemiology of suicide: an age-period-cohort hysteresis model. PLoS ONE, 11(7), e0158538. https://doi.org/10.1371/journal.pone.0158538.
Chauvel, L., & Schröder, M. (2014). Generational inequalities and welfare regimes. Social Forces, 92(4), 1259–1283. https://doi.org/10.1093/sf/sot156.
Chauvel, L., & Smits, F. (2015a). The endless baby boomer generation: cohort differences in participation in political discussions in nine European countries in the period 1976–2008. European Societies, 17(2), 242–278. https://doi.org/10.1080/14616696.2015.1006133.
Chauvel, L., & Smits, F. (2015b). The endless baby-boomer generation: cohort differences in participation in political discussions in nine European countries in the period 1976–2008. European Societies, 17(2), 242–278.
Choi, A., Guio, J., & Escardibul, J. (2020). The challenge of mapping overeducation and overskilling across countries: a critical approach using PIAAC. Compare: A Journal of Comparative and International Education, 50(2), 1–20.
Clark, B., Joubert, C., & Maurel, A. (2017). The career prospects of overeducated Americans. IZ Journal of Labor Economics, 6, 3. https://doi.org/10.1186/s40172-017-0053-4.
Collins, R. (1971). Functional and conflict theories of educational stratification. American Sociological Review, 36, 1002–1019.
Crivellaro, E. (2016). The college wage premium over time: trends in Europe in the last 15 years. Inequality: Causes and consequences (pp. 287–328). Emerald Group Publishing Limited: Bingley.
Croce, G., & Ghignoni, E. (2012). Demand and supply of skilled labour and overeducation in Europe: a country-level analysis. Comparative Economic Studies, 54(2), 413–439.
Davia, M. A., McGuiness, S., & Connell, P. J. (2017). Determinants of regional differences in rates of overeducation in Europe. Social Science Research, 63, 67–80.
Dolado, J. J., García-Serrano, C., & Jimeno, J. F. (2002). Drawing lessons from the boom of temporary jobs in Spain. The Economic Journal, 112(480), F270–F295.
Dolton, P., & Vignoles, A. (2000). The incidence and effects of overeducation in the UK graduate labour market. Economics of Education Review, 19(2), 179–198.
Dolado, J., Jansen, M., & Jimeno, J. (2009). On-the-Job Search in a matching model with heterogeneous jobs and workers. The Economic Journal, 119(534), 200–228.
Esping-Andersen, G. (2013). The three worlds of welfare capitalism. Oxford: Wiley.
Esping-Andersen, G., & Regini, M. (2000). Why deregulate labour markets?. England: Oxford University Press.
Firebaugh, G. (1997). Analyzing repeated surveys sage university paper series on quantitative applications in the social sciences, 07–115. Thousand Oaks: Sage.
Flisi, S., Goglio, V., Meroni, E. C., Rodrigues, M., & Vera-Toscano, E. (2017). Measuring occupational mismatch: overeducation and overskill in Europe—Evidence from PIAAC. Social Indicators Research, 131(3), 1211–1249.
Flisi, S., Goglio, V., Meroni, E. C., & Vera-Toscano, E. (2019). Cohort patterns in adult literacy skills: How are new generations doing? Journal of Policy Modeling, 41(1), 52–65.
Freedman, M. (2017). Are recent generations catching up or falling behind?: Trends in inter-generational inequality. LIS Working paper 689, LIS Cross-National Data Center in Luxembourg.
Frei, C., & Sousa-Poza, A. (2012). Overeducation: permanent or transitory? Applied Economics, 44(14), 1837–1847.
Ghignoni, E. (2012). Young workers’ overeducation and cohort effects in “PIGS” countries versus the Netherlands: a pseudo-panel analysis. Rivista di Politica Economica, 1, 197–243.
Glenn, N. (2005). Cohort analysis sage university paper series on quantitative applications in the social sciences 07–115. Thousand Oaks: Sage.
Green, F., & Zhu, Y. (2010). Overqualification, job dissatisfaction, and increasing dispersion in the returns to graduate education. Oxford Economic Papers, 62(4), 740–763. https://doi.org/10.1093/oep/gpq002.
Groot, W. (1996). The incidence of, and the returns to overeducation in the UK. Applied Economics, 28, 1345–1350.
Groot, W., & van den Brink, H. M. (2000). Overeducation in the labour market: a meta-analysis. Economics of Education Review, 19(2), 149–158.
Holford, T. R. (1983). The estimation of age, period and cohort effects for vital rates. Biometrics, 39, 311–324.
Kahn, L. M. (1998). Against the wind: bargaining recentralisation and wage inequality in Norway 1987–91. Economic Journal, 108, 603–645.
Karonen, E., & Niemela, M. (2019). Life course perspective on economic shocks and income inequality through age–period–cohort analysis: evidence from Finland. The Review of Income and Wealth, 66(2), 287–310.
Keep, E., & Mayhew, K. (1996). Economic demand for higher education—a sound foundation for further expansion? Higher Education Quarterly, 50(2), 89–109.
Kiersztyn, A. (2013). Stuck in a mismatch? The persistence of overeducation during twenty years of the post-communist transition in Poland. Economics of Education Review, 32, 78–91.
Kim, S. (2015). Who has taken the lead in the transition to dual earner model?: Age, period, cohort analysis. Journal of Korean Women’s Studies, 31, 147–180. (in Korean).
Korpi, T., & Tåhlin, M. (2009). Educational mismatch, wages, and wage growth: overeducation in Sweden, 1974–2000. Labour Economics, 16(2), 183–193.
Krahn, H. and Lowe, G. (1998). Literacy utilization in Canadian workplaces. International Adult Literacy Survey. Statistics Canada, Catalogue no. 89–552–MPE.
Lee, Y. (2019). Cohort differences in changing attitudes toward marriage in South Korea, 1998–2014: an age-period-cohort-detrended model. Asian Population Studies, 15(3), 266–281. https://doi.org/10.1080/17441730.2019.1647976.
Liu, K., Salvanes, K. and Sorensen, K. (2012). Good skills in bad times: cyclical skill mismatch and the long-term effect of graduating in a recession. IZA Discussion Paper n. 6820
Mavromaras, K., & McGuinness, S. (2012). Overskilling dynamics and education pathways. Economics of Education Review, 31(5), 619–628.
Mavromaras, K., McGuinees, S., O’Leary, N., Sloane, P., & Fok, Y. K. (2010). The problem of overskilling in Australia and Britain. The Manchester School, 78(3), 219–241.
McGuinness, S. (2006). Overeducation in the labour market. Journal of Economic Surveys, 20(3), 387–418.
McGuinness, S., Bergin, A., & Whelan, A. (2018a). Overeducation in Europe: trends, convergence and drivers. Oxford Economic Papers, 70(4), 994–1015.
McGuinness, S., Pouliakas, K., & Redmond, P. (2018). Skills mismatch: concepts, measurement and policy approaches. Journal of Economic Surveys, 32(4), 1–31.
Meroni, E. C., & Vera-Toscano, E. (2017). The persistence of overeducation among recent graduates. Labour Economics, 48, 120–143.
OECD. (2013). Education at a glance 2013: OECD Indicators. Paris: OECD Publishing. https://doi.org/10.1787/eag2013-en.
OECD (2016). State of Higher Education 2015–2016. The OECD Higher Education Programme (IMHE).http://www.oecd.org/education/imhe/TheStateofHigherEducation2015-16.pdf (last accessed February 2020)
OECD. (2017). Getting skills right: Italy, policy review. Paris: OECD Publishing. https://doi.org/10.1787/25206125.
Paccagnella, M. (2016). Literacy and numeracy proficiency in IALS, ALL and PIAAC. OECD Education Working Papers No. 142. Paris: OECD Publishing, http://dx.doi.org/https://doi.org/10.1787/5jlpq7qglx5g-en
Pinheiro, R., & Stensaker, B. (2018). Balancing efficiency and equity in a welfare state setting: high participation higher education in Norway—high participation systems of higher education. In B. Cantwell, S. Marginson, & A. Smolentseva (Eds.), high participation systems of higher education. England: Oxford University Press.
Pouliakas, K. (2013). The skill mismatch challenge in Europe. Commission Staff Working Document. Volume VIII/IX. Luxembourg: Publications Office of the European Union. https://register.consilium.europa.eu/doc/srv?l=EN&f=ST%25205571%25202013%2520ADD%25209
Quintini, G. (2011). Over-qualified or under-skilled: a review of the existing literature. OECD Social, Employment and Migration Working Papers No. 121.
Robst, J. (1995). Career mobility, job match, and overeducation. Eastern Economic Journa, 21, 539–550.
Rubb, S. (2013). Overeducation, undereducation and asymmetric information in occupational mobility. Applied Economics, 45(6), 741–751.
Salvanes, K. G., & Forre, S. E. (1999). Job Destruction, Heterogeneous Workers, Trade and Technical Change: Matched Plant/Worker Data Evidence from Norway. Bergen: Norwegian School of Economics and Business Administration.
Schofer, E., & Meyer, J. W. (2005). The worldwide expansion of higher education in the twentieth century. American Sociological Review, 70(6), 898–920.
Sicherman, N. (1991). Overeducation in the labour market. Journal of Labour Economics, 9(2), 101–122.
Sicherman, N., & Galor, O. (1990). A theory of career mobility. Journal of Political Economy, 98(1), 169–192.
Thurow, L. C. (1975). Generating Inequality. New York: Basic Books.
Välimaa, J., Hoffman, D., & Huusko, M. (2007). The Bologna process in Finland. Creating the European Area of Higher Education (pp. 43–68). Dordrecht: Springer.
Verbeek, M., & Vella, F. (2005). Estimating dynamic models from repeated cross-sections. Journal of Econometrics, 127(1), 83–102.
Verhaest, D., & Van der Velden, R. (2013). Cross-country differences in graduate overeducation. European Sociological Review, 29, 642–653.
Wen, L., & Maani, S. A. (2019). Job mismatches and career mobility. Applied Economics, 51(10), 1010–1024.
Witte, J.K. (2006). Change of degrees and degrees of change: comparing adaptations of European higher education systems in the context of the Bologna process. Doctoral dissertation. Retrieved from https://research.utwente.nl/files/15302496/2006wittedissertation.pdf (June 2020).
Yang, Y., Schulhofer-Wohl, S., Fu, W. J. J., & Land, K. C. (2008). The intrinsic estimator for age-periodcohort analysis: What it is and how to use it. American Journal of Sociology, 113, 1697–1736.
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Appendices
Appendix
See Tables 3 ,
4 and
Details on how to build the skills mismatch indicator based on skill use
The skills mismatch measure is built following Krahn and Lowe (1998). In their paper, they build “workplace requirement indices” using the questions on how often respondents write or read documents of different types. Then, they build a measure of Literacy fit and mismatch in the workplace, combining the level of literacy skills and the literacy requirement in the workplace. They define a worker as having a literacy surplus if he has high literacy skills and low literacy requirements. We apply the same methodology to our data. However, since the surveys did not ask the exact same questions for workplace literacy requirements, we had to adjust the methodology to make it comparable across the three surveys.
First, we considered only common questions on workplace literacy requirements s to build the workplace requirement indices (see Table 3 below):
Second, we needed to adjust the scales as the list of possible answers regarding the frequency of the different tasks (workplace literacy requirements) was not the same in the three surveys. For example, as shown in Table 4 for low-frequency use in the PIAAC, respondents could choose between Never or Less than once per month, while in the IALS there was a single choice: Rarely or never. Therefore, we grouped some of the items as shown in Table 4.
In our indicator of skills mismatch, there are 3 possible frequencies of skills used at work for each of the 9 questions: 1. Rarely or never, 2. Less than once per week, 3. At least once per week/daily. Higher values indicate more frequent reading/writing requirements.
The average of these three-category “workplace literacy requirements” across the questions is taken for each individual (ranging from 1 to 3) and is compared to the 3 literacy levels, built as explained in the next paragraph.
The literacy levels are built based on the distribution of skills in the working population. The population is divided into three groups according to where their level of skill falls compared to the 33rd and 66th percentile of the skill distribution in the population (Level 1: individuals whose skills level, measured by the first plausible value—variable PVLIT1—is below the 33rd percentile of the distribution of skills in the working population in the country; Level 2: between the 33rd and 66th percentile; Level 3: above the 66th percentile). A comparison of workplace literacy requirement to the skill level tells us whether an individual is overskilled or not: individuals whose literacy level is higher than the “workplace literacy requirement” category are considered to be overskilled.
Rights and permissions
About this article
Cite this article
Vera-Toscano, E., Meroni, E.C. An Age–Period–Cohort Approach to the Incidence and Evolution of Overeducation and Skills Mismatch. Soc Indic Res 153, 711–740 (2021). https://doi.org/10.1007/s11205-020-02514-5
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11205-020-02514-5