Can job/worker mismatches help to explain wages and job satisfaction differences among comparable workers?

Abstract

The relevance of skill job-worker mismatches is analized along with that of education mismatch on Spanish data from the European Community Household Panel (ECHP) survey for the year 2001. Statistical analysis for the prevalence of both types of mismatches, as well as econometric analysis of their wage and job satisfaction consequences has been carried out. Three main findings emerge. First, the degree of statistical association between education and skill mismatches is rather low in the Spanish labour market, suggesting that education mismatch is a rather poor proxy for skill mismatch. Second, both skill and education mismatches appear to have separate, negative effects on wages although skill mismatches show stronger influences. Third, skill mismatches severely reduce workers job satisfaction while the effects of education mismatch weakened when skill mismatches are accounted for. Consequently, skill mismatch is found to be a relevant determinant of wage, as well as a stronger predictor of workers’ utility, than education mismatch.