Labour Market Mismatch Among UK Graduates: An Analysis Using REFLEX Data

There is much disagreement in the literature over the extent to which graduates are mismatched in the labour market and the reasons for this. In this paper we utilise the Flexible Professional in the Knowledge Society (REFLEX) data set to cast light on these issues, based on data for UK graduates. REFLEX examines the labour market status of graduates five years after graduation and distinguishes between first and current job, vertical and horizontal mismatch, over/underqualification and over/underskilling as well as including a range of questions on the nature of work organisation and individual competences. We find substantial pay penalties for over-education for both sexes and for overskilling in the case of men only. When both education and skill mismatch variables are included together in the model only overskilling reduces job satisfaction consistently for both sexes. Using job attributes data it appears that the lower wages of the overqualified may in part simply represent a compensating wage differential for positive job attributes, while for men at least there are real costs to being overskilled.skills, education, job matching, graduates

Disability and Skill Mismatch

This paper integrates two strands of literature on overskilling and disability using the 2004 British Workplace Employment Relations Survey (WERS). It finds that the disabled are significantly more likely to be mismatched in the labour market, to suffer from a pay penalty and to have lower job satisfaction, the effects being stronger for the work-limited disabled. Giving workers more discretion over how they perform their work would significantly reduce these negative effects.skills, disability, job matching, earnings, job satisfaction

Graduate Employment in the UK: An Application of the Gottschalk-Hansen Model

There is an apparent inconsistency in the existing literature on graduate employment in the UK. While analyses of rates of return to graduates or graduate markups show high returns, suggesting that demand has kept up with a rapidly rising supply of graduates, the literature on over-education suggests that many graduates are unable to find employment in graduate jobs and the proportion over-educated has risen over time. Using a simple supply and demand model applied to UK data that defines graduate jobs in terms of the proportion of graduates and/or the graduate earnings markup within occupations, we find that the employment of graduates in non-graduate jobs has declined over time. Hence, there is no evidence of an over-production of graduates in the UK.employment, wages, education, graduates

Adjusting to Skill Shortages: Complexity and Consequences

Skill shortages are often portrayed as a major problem for the economies of many countries including the Australian economy. Yet, there is surprisingly little evidence about their prevalence, causes and consequences. This paper attempts to improve our understanding about these issues by using econometric methods to analyse the Business Longitudinal Database, an Australian panel data-set with information about skill shortages in small- and medium-sized businesses during 2004/05. We use this information to: (1) explore the incidence of skill shortages and the business attributes that are associated with them; (2) identify which businesses face more complex skill shortages, as measured by the number of different causes reported simultaneously; and, uniquely, (3) examine how this complexity affects businesses' responses to skill shortages and aspects of their subsequent performance. We show that complex skill shortages are more likely than simpler (single-cause) skill shortages to persist and to trigger defensive responses from businesses. We reject the conception of skill shortages as a homogenous phenomenon, and demonstrate the importance of distinguishing between skill shortages according to whether they have simple or complex causes.skill shortages, small medium enterprises

Job Anxiety, Work-Related Psychological Illness and Workplace Performance

This paper uses matched employee-employer data from the British Workplace Employment Relations Survey (WERS) 2004 to examine the determinants of employee job anxiety and work-related psychological illness. Job anxiety is found to be strongly related to the demands of the job as measured by factors such as occupation, education and hours of work. Average levels of employee job anxiety, in turn, are positively associated with work-related psychological illness among the workforce as reported by managers. The paper goes on to consider the relationship between psychological illness and workplace performance as measured by absence, turnover and labour productivity. Work-related psychological illness is found to be negatively associated with several measures of workplace performance.job anxiety, stress, absence, labour productivity

Labour Market Mismatch Among UK Graduates; An Analysis Using REFLEX Data. ESRI WP294, May 2009

There is much disagreement in the literature over the extent to which graduates are mismatched in the labour market and the reasons for this. In this paper we utilise the Flexible Professional in the Knowledge Society (REFLEX) data set to cast light on these issues, based on data for UK graduates. REFLEX examines the labour market status of graduates five years after graduation and distinguishes between first and current job, vertical and horizontal mismatch, over/underqualification and over/underskilling as well as including a range of questions on the nature of work organisation and individual competences. We find substantial pay penalties for overeducation for both sexes and for overskilling in the case of men only. When both education and skill mismatch variables are included together in the model only overskilling reduces job satisfaction consistently for both sexes. Using job attributes data it appears that the lower wages of the overqualified may in part simply represent a compensating wage differential for positive job attributes, while for men at least there are real costs to being overskilled

Disability and Job Mismatches in the Australian Labour Market

We examine the relationship between disability, job mismatch, earnings and job satisfaction, using panel estimation on data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey (2001-2008). While we do not find any relationship between work-limiting disability and over-skilling, it appears that there is a positive relationship between work-limiting disability and over-education, which is consistent with disability onset leading to downward occupational movement, at least in relative terms. We find a negative correlation between work-limiting disability and both earnings and job satisfaction. However, there is only evidence of a causal relationship in terms of the latter, where the impact of disability is found to be multifaceted.job mismatch, disability, earnings, job satisfaction

Work-Related Health in Europe: Are Older Workers More at Risk?

This paper uses the fourth European Working Conditions Survey (2005) to address the impact of age on work-related self-reported health outcomes. More specifically, the paper examines whether older workers differ significantly from younger workers regarding their job-related health risk perception, mental and physical health, sickness absence, probability of reporting injury and fatigue. Accounting for the 'healthy worker effect', or sample selection – in so far as unhealthy workers are likely to exit the labour force – we find that as a group, those aged 55-65 years are more 'vulnerable' than younger workers: they are more likely to perceive work-related health and safety risks, and to report mental, physical and fatigue health problems. As previously shown, older workers are more likely to report work-related absence.endogeneity, fatigue, absence, physical health, mental health, healthy worker selection effect

Job Mismatches and Labour Market Outcomes: Panel Evidence on Australian University Graduates

The interpretation of graduate mismatch manifested either as overeducation or as overskilling remains problematical. This paper uses annual panel information on both educational and skills mismatches uniquely found in the HILDA survey to analyse the relationship of both mismatches with pay, job satisfaction and job mobility. We find that overeducation and overskilling are distinct phenomena with different labour market outcomes and that their combination results in the most severe negative labour market outcomes. Using panel methodology reduces strongly the size of many relevant coefficients, questioning previous cross-section results and suggesting the presence of considerable unobserved heterogeneity which varies by gender.overeducation, overskilling, wages, satisfaction, mobility