The role of education pathways in the relationship between job mismatch, wages and job satisfaction: a panel estimation approach

Abstract

This paper examines the outcome of over-skilling and over-education on wages and job satisfaction of full-time employees in Australia between 2001 and 2008. We employ a random effects probit model with Mundlak corrections. We find differences by type of mismatch, education pathway, and gender. We categorise reported mismatches as genuine mismatches, weak mismatches, and no evidence of a mismatch. There is evidence of unobserved individual heterogeneity as in some cases wage and job satisfaction become insignificant using panel estimation as opposed to pooled ordinary least squares or probit analysis. Furthermore, genuine mismatch derives more from over-skilling than from over-education.