* Over/under skilling. A person can be simultaneously overqualified and underskilled. This often happens when the field of education does not correspond to the field of occupation.
* Skills obsolescence often accompanies digitalization and technological advancement but can also occur when skills are not being regularly practiced and become obsolete after time. Both of these scenarios can be a result of changing demands in the labour market.
Why is it important to address the skills mismatch challenge?
The consequences of skills mismatch reach all levels of the labour market.
At the individual level there are serious wage penalites especially for overqualification that eventually affect both job and life satisfaction. For example, you would assume that in developing countries, overqualification should not be a problem because of a lack of sufficient training opportunities. However, people receive training and are still unable to find a job that corresponds to their skill level, which means they are not employed at their full productivity potential. In addition, skill deficiencies decrease chances of landing a job altogether.
-
The phenomenon of education mismatch is common at workplace. It occurs when the educational attainment of workers do not match with the education level required by their jobs. Over-education happens when individual's educational attainment is higher than what is required by the job, creating surplus education, whereas under-education occurs when the job itself requires higher qualification than what the worker is holding, thereby producing deficit education. The major negative effect of education mismatch in particular over-education is suboptimal allocation of resources in that it brings serious negative consequences such as lower earnings (Chevalier, 2003; Wolbers, 2003), lower job satisfaction (Burris, 1985) and lower productivity (Tsang et al, 1999)
(...) this paper tests hypothesis for four fundamental theories that explain mismatch phenomenon, namely human capital theory, job competition model, assignment framework and technological theory.
Human capital theory (Becker, 1964) perhaps is the earliest formalized theory that explains the education mismatch phenomenon. It argues that the skills acquired through education represent human capital and investing in it leads to higher productivity and returns to education, and deduces that wages are determined mainly by the supply of human capital.
The job competition model provides an entire different view from that of the human capital theory. Here, the job characteristics are the determinants of wages, not the education attained of workers (Thurow, 1975) i,e, it is education required by job that determines the wage. The job competition model is thus a demand side view affecting earnings. The mismatch (or in particular over-education) arises when workers obtain education in excess of the job requirements to stay in the queue for jobs or to bump out less educated individual.
https://www.eera-ecer.de/ecer-programmes/conference/21/contribution/37228/
Comments
Post a Comment