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Over-Qualification and the Dimensions of Job Satisfaction

Abstract

The spread of over-qualification is a consequence of individuals having acquired more credentials than required at the workplace. In some cases, it may be that this mismatch plays a role in allowing workers to compensate for the lack of some other skills, to escape from unemployment, or to achieve job stability in the labour market. Consequently, workers may feel no less satisfied, at least in some aspects, than adequately-matched workers. The aim of this paper is to analyse the relationship between over-qualification and the various dimensions of job satisfaction in Spain, a country characterised by a strongly-segmented labour market with high unemployment levels, and a significant number of mismatched employees. Using micro data for a representative sample of Spanish workers, we carry out simultaneous maximum likelihood estimations on a two-equation system to control for potential endogeneity. The results obtained provide evidence that does not reject the hypothesis that mismatched workers do not necessarily feel less satisfied than adequately-matched workers in the dimensions of job satisfaction related to extrinsic domains or social relations.

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Notes

  1. 1.

    Liu and Wang (2012) discuss the advantages of using this type of data.

  2. 2.

    However, most recent studies tend to challenge the career mobility hypothesis (see Baert et al. 2013 and references therein) and find that over-qualification is a permanent phenomenon leading to permanent losses in earnings throughout individual careers (McKee-Ryan and Harvey 2011; for the Spanish case, see Acosta-Ballesteros et al. 2018).

  3. 3.

    The lack of relevant data on skill mismatch has led some authors (Chevalier 2003; Green and Zhu 2010, among others) to try to capture it from the responses of workers to satisfaction with their education and/or skills acquired in school. We follow a similar approach to capture unobserved heterogeneity among equally-educated workers, as described in Sect. 3.

  4. 4.

    This may be especially important in periods of recession (Tam 2010), and/or in areas where unemployment is high, since the decision to invest in education is not only regarded as a way to gain higher wages but also as a way of insuring against unemployment (Fernández 2006).

  5. 5.

    In a first sample, the eight different domains of job satisfaction are derived from an initial set of 36 items from the job satisfaction survey (JSS), and are: benefits, communication, co-workers, nature of work, pay, promotion, rewards, and supervision. In a second sample, the five domains are derived from an initial set of 18 items from the Job Descriptive Index (JDI): they are work, pay, promotion, supervision, and co-workers, plus a general item of job satisfaction.

  6. 6.

    Extrinsic factors include salary, physical conditions, generous holidays, job security, promotion, and work-times. Intrinsic factors cover work attitudes like autonomy, skill utilization, task variety, learning opportunities, task significance, allowing initiative, and work with responsibility. Social significance includes contact with customers, contact with co-workers, social service, social status, and supervisor guidance.

  7. 7.

    This supposes a reduction of close to 19% from the initial sample.

  8. 8.

    See, for example, the contrasting views between Erdogan et al. (2011b) and Maltarich et al. (2011) about the binary or continuum character of over-qualification. See also the study of Verhaest and Omey (2006) that compares various measures of over-qualification.

  9. 9.

    Apart from a possible reluctance of individuals to acknowledge being under-educated, it is reasonable to consider that experience and on-the-job training may help workers to reduce the self-perception of being under-educated.

  10. 10.

    Some causes are innate characteristics; the spread of tertiary education and college institutions (which has given rise to heterogeneity in the distribution of graduate abilities and of university quality), and the choice of the academic degree (see Chevalier 2003; Green and McIntosh 2007; Ordine and Rose 2009).

  11. 11.

    PIAAC: Programme for the International Assessment of Adult Competencies conducts the Survey of Adult Skills. More information on http://www.oecd.org/skills/piaac/.

  12. 12.

    Green and Zhu (2010) follow a similar approach using self-declared measures of skill mismatch.

  13. 13.

    Other cut-points have also been considered in estimations, giving rise to different groupings. Estimates using any of these groupings yield qualitatively similar results to those presented in the following section, that are obtained according to the second approach described in the text.

  14. 14.

    This evidence makes clear that low-educated individuals are more likely to be in jobs where they feel their education is useless, as opposed to the case of highly-educated individuals. We thank an anonymous referee for this important point.

  15. 15.

    In the rest of the paper, we will use interchangeably the terms of mismatch or over-qualification to capture the different dimensions considered: over-educated as against adequately educated, on one hand; and adjusted, unadjusted, apparent over-educated, and genuine over-educated, on the other.

  16. 16.

    In the data base there is no information on cognitive or emotional reactions.

  17. 17.

    Similar arguments are alleged by Verhaest and Omey (2009) and Kampelmann and Rycx (2012), among others. In order to consider that the inclusion of these factors may capture any compensation to the job and then mask the true direct effect of over-qualification on job satisfaction, we have carried out a similar analysis without including job characteristics: key results remain unaltered. Results are not shown, but are available from the authors upon request.

  18. 18.

    Occupational categories are not included, since they are correlated strongly with education. An alternative to including the unemployment rate is using year dummies to capture the moment in the business cycle. When doing that, estimated coefficients for each year are positive and increasing as time goes by, suggesting that satisfaction increased in the sample years, as did unemployment rates.

  19. 19.

    When endogeneity is considered, however, intermediate levels of education are associated with higher job satisfaction (see below).

  20. 20.

    Following Gobernado (2007), Manual and services occupations correspond to groups 4, 5, 8 and 9 of the one-digit 1994 CNO Clasificación Nacional de Ocupaciones (National Classification of Occupations). This is based on the 1988 ISCO classification, but they do not entirely coincide. Group 4: Clerks; group 5: Services and sales workers; group 8: Machine operators and assemblers; group 9: Elementary occupations. The use of instruments to account for measurement errors in estimating returns to over-education dates back to Robst (1994).

  21. 21.

    We experimented with a less-restrictive, alternative definition of the objective measure of over-education. Specifically, this alternative definition takes value 1 if the employee has university studies, upper secondary, or vocational education attainments but works in a manual or services unskilled occupation, and 0 otherwise. Qualitative results remain unchanged. We thank an anonymous referee for this suggestion.

  22. 22.

    We thank an anonymous referee for noting this.

  23. 23.

    The rest of the coefficients are not reported to save space. They show a similar pattern to that described for overall job satisfaction, and results are available from the authors upon request.

  24. 24.

    The other dimensions in which the relationship is estimated to be negative, satisfaction with vacations, activity, and hour flexibility, the relevant sign is obtained from ordered probit estimations (first pair of columns in Table 4) since, in these cases, the assumption of exogeneity of over-education is not rejected.

  25. 25.

    Whereas these results coincide with those by Chevalier (2003), Chevalier and Lindley (2009) and Green and Zhu (2010) for the UK, other studies for Spain, using a different approach based on specific measures for educational and skill mismatch, tend to show that the latter has stronger influence on job satisfaction than educational mismatch (Badillo-Amador et al. 2012; Mateos-Romero and Salinas-Jimenez 2018a). Our approach does not allow a direct comparison of our results with theirs.

  26. 26.

    Badillo-Amador et al. (2012) find, however, that educational mismatch is not related to satisfaction with wage, even though skill mismatch is associated with lower satisfaction with wages, in data from the European Community Household Panel for years 1994–2001.

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Acknowledgements

The authors would like to thank three anonymous referees as well as participants at the XII Spanish Labour Economics Meeting, for helpful comments on earlier drafts of this paper.

Funding

Funding was provided by the Autonomous Government of Aragon (Research Group S32-17R), co-financed by ERDF 2014-2020, and University of Zaragoza  (UZ2018-SOC-01).

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Correspondence to Víctor M. Montuenga-Gómez.

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Appendix

Appendix

See Table 5 for a description varieables used in the analysis. We estimate Eq. (1) by 2SLS, considering our objective measure of over-qualification as an instrument for self-perceived over-qualification in Eq. (2). This supposes that job satisfaction is cardinal. Results are presented in Table 6.

Table 5 Variable definitions and average values (2007–2010).
Table 6 Over-education and over-qualification coefficients for all dimensions of job satisfaction. 2SLS estimation.

C-tests for endogeneity find that over-education cannot be rejected as exogenous for the overall dimension of job satisfaction, as well as in the dimensions of hour flexibility, activity at work, and firm-provided training. In the rest of the cases, exogeneity of over-education is rejected and the 2SLS estimation is more appropriate than the ordered probit. With respect to the case of MLE for dealing with endogeneity, there are some few differences in the dimensions in which over-education can be considered to be exogenous. Similarly, in the case of the over-qualification variable, there are no differences with respect to the MLE estimation, except that, now, with the 2SLS estimation, satisfaction with hour flexibility cannot be rejected as exogenous. Cragg–Donald/Stock–Yogo tests on weak instruments, and Hansen tests on over-identifying restrictions confirm the validity of the instrument and the reliability of our estimates.

Qualitative results are the same as in the MLE estimation: in most of the extrinsic dimensions (organization, promotion, the workday, duration of breaks, job security/stability, and health) as well as in social relations and relations with management, the over-qualified do not feel less satisfied than the adequately-educated.

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García-Mainar, I., Montuenga-Gómez, V.M. Over-Qualification and the Dimensions of Job Satisfaction. Soc Indic Res 147, 591–620 (2020). https://doi.org/10.1007/s11205-019-02167-z

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Keywords

  • Over-qualification
  • Job satisfaction
  • Simulated maximum likelihood estimation
  • Spain

JEL Classification

  • D82
  • I26
  • J24
  • J28
  • J62