Overqualification and Career

Publication type

Conference Paper


International German Socio-Economic Panel User Conference


Publication date

July 5, 2006


A considerable proportion of the labour force is overqualified or overeducated for the work that it does. This leads to a wage penalty relative to those who are 'correctly matched'. Various reasons have been given. One is that overqualification reflects variation in individual skills which relates to demand in ways which are generally unmeasured. Another refers to career. Overqualification might be a temporary phenomenon, related to poor information and therefore initial career uncertainty. Over the career matching improves incrementally; panel data are therefore needed to test its extent and wage effects. This paper measures the longevity of overqualification, analyses the joint effects of overqualification on wages, and the effect of overqualification on job exits. The analysis uses the GSOEP (1984-2004), supported by the eLiving survey (2001-2). The result show that overqualificaion is not a short-run phenomenon, and has long-term negative career consequences, both on pay and on the probability of exits from employment.



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