Abhatoo - Centre Nationale de Documentation

Mismatches between workers’ competences and what is required by their job are widespread in OECD countries. Studies that use qualifications as proxies for competences suggest that as many as one in four workers could be over-qualified and as many as one in three could be under-qualified for their job. However, there is significant variation across countries and socio-demographic groups. Our meta-analysis of country studies suggests that over 35% of workers are over-qualified in Sweden compared with just 10% in Finland, with most other OECD countries located between these two extremes. There is also extensive evidence that youth are more likely to be over-qualified than their older counterparts and the same is found to be true for immigrant workers compared with a country’s nationals. On the other hand, no definitive evidence has been found of the persistence of qualification mismatch, with some papers showing that over-qualification is just a temporary phenomenon that most workers overcome through career mobility and others finding infrequent trantisions between over-qualification and good job matches. Across the board, over-qualified workers are found to earn less than their equally-qualified and well-matched counterparts but more than appropriately-qualified workers doing the same job. Under-qualified workers are found to earn more than their equally-qualified and well-matched counterparts but less than appropriately-qualified workers doing the same job. Over-qualified workers are also found to be less satisfied about their job and more likely to leave their work than well-matched workers with the same qualifications.

In addition to studies focusing on qualification mismatch, some authors have studied skill mismatch more directly by exploiting self-reported discrepancies between workers’ overall skill level and the skills used at work. These papers find only a weak link between qualification and skill mismatch suggesting that qualification mismatch may be due primarily to skill heterogeneity within qualification groups. They also suggest that skill underutilisation and skill deficits do exist and have important consequences on job satisfaction, turnover and wages and account for some of the effects of qualification mismatch on these outcome variables.

Very few studies in the rich mismatch literature discuss policy initiatives to tackle the discrepancies between the demand and supply of skills. Most analysts call for better guidance services and for a better match between what the education system delivers and what the labour market needs. Adult learning, work-based training and training in the context of active labour market policies for the unemployed are also deemed important to prevent skill obsolescence and upgrade skills in light of new requirements driven by technological change. Finally, rigid wage setting institutions may prevent wages from adjusting in response to mismatch and stringent regulations on the firing of permanent workers could make it more difficult for firms to resolve mismatch by adapting the workforce structure.