THE PROBLEM OF OVERSKILLING IN AUSTRALIA AND BRITAIN

Authors

  • KOSTAS MAVROMARAS,

    1. University of Melbourne and IZA, Bonn
    Search for more papers by this author
    • Manuscript received 19.10.07; final version received 12.11.08.

  • SEAMUS MCGUINNESS,

    1. Economic and Social Research Institute, Dublin
    Search for more papers by this author
  • NIGEL O'LEARY,

    1. Swansea University
    Search for more papers by this author
  • PETER SLOANE,

    1. Swansea University and IZA, Bonn
    Search for more papers by this author
  • YI KING FOK

    1. University of Melbourne
    Search for more papers by this author
    •  

      The supply of data by the UK Data Archive (for Workplace Employment Relations Survey) is gratefully acknowledged. The Household, Income and Labour Dynamics in Australia (HILDA) survey was initiated and is funded by the Commonwealth of Australia Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) and is managed by the Melbourne Institute of Applied Economic and Social Research. Funding support by the Economic and Social Research Council (award no. RES-000-22-1982), the Australian Research Council (award no. DP0663362) and the Melbourne Institute is acknowledged. We would also like to thank three anonymous referees and the editor for their helpful comments. The usual disclaimer applies for errors and omissions.


Abstract

In this paper we examine the parallel trends in education and labour market developments in Australia and Britain using unique information on reported overskilling in the workplace. To a degree, the overskilling information overcomes the problem of unobserved ability differences and focuses on the actual job–employee mismatch more than the conventional overeducation variables can. The paper finds that the prevalence of overskilling decreases with education at least for Australia, but the wage penalty associated with overskilling increases with education. Although the prevalence of overskilling differs between Australia and Britain, the pattern of the wage penalties is fairly similar in both countries.

Ancillary