Overqualification: Reasons, measurement issues, and typological affinity to unemployment

Abstract

This paper focuses primarily on two essential aspects of overqualification research: the reasons why people find themselves in underskilled jobs and the problems involved in establishing a valid means of identifying such a situation. Starting with an extensive terminological discussion, the paper briefly introduces the various theories explaining the phenomenon of overqualification and discusses some influential factors that have rarely been examined in any work of literature, namely institutional and macroeconomic conditions and labour utility and productivity assessments on the supply and demand sides. The next step is a systematic examination of the problems involved in identifying underskilled jobs. The paper goes on to provide a comprehensive review of research literature, beginning with the origins of the debate in the educational expansion of the 1970s and 1980s. It retraces the academic discussion on the overqualification problem in the United States, then portrays the German situation as an example of the early development of overqualification research outside the United States. It goes on to introduce more recent work from the United States and Europe, including international comparative studies. On the basis of longitudinal data from Germany, the theoretical analogy between unemployment and overqualification is empirically tested. Finally, the paper examines longer-term income effects of overqualification. The study ends with a catalogue of methodological conclusions, aimed at employment researchers, and substantive considerations, aimed at policymakers in the fields of education and employment.