Education and Mismatch in the Labor Market

It is well recognised that unemployment causes great welfare losses and social problems in all industrialized societies. However, it is less obvious what losses are generated by the fact that even employed workers might have unused and therefore unproductive skills when they work in jobs for which they are overqualified. Skills are also unused when people's, and here especially mothers' labor supply is restricted by familial constraints. One of the main aims of this project was to draw attention to these facts and to show that the actual loss produced by mismatch in employment considerably exceeds that indicated by unemployment statistics, even if analyses of hidden labour reserves are taken into account. An important question within this project was how these hidden labour reserves can be reactivated.

German research focusing explicitly on overeducation is still a rare, but rapidly developing. In terms of publication activities, this project was by far the most productive in Germany. After the MPIB Mismatch Project was initiated in 1998, it released about thirty publications. These include an edited volume (Büchel, de Grip and Mertens, forthcoming) that presents selected papers from our November 2002 conference - the first that ever explicitly focused on overeducation, jointly organized by ROA at Maastricht University and our project. The programme reflected the state of the art in ongoing overeducation research.

For the future, we planned to look in more detail at the female labour supply decisions and therefore extent the mismatch project to other kinds of mismatch apart from overeducation. Mismatch between acquired skills and skills that are productively used in the labor market also arise in all situations of hidden labour reserves. A mismatch situation can be stated in all situations where people are hindered to make fully use of their acquired skills in the labor market. We here focused on analysing labor supply constraints caused by specific familial circumstances, mainly by living together with children in a suboptimal institutional, economical and social environment.

Selected Publications

Büchel, F., & Van Ham, M. (2003). Overeducation, regional labor markets, and spatial flexibility. Journal of Urban Economics, 53, 482-493.

Büchel, F., & Mertens, A. (2004). Overeducation, undereducation, and the theory of career mobility. Applied Economics, 36, 803-816.

Büchel, F., De Grip, A., & Mertens, A. (Eds.). (2003). Overeducation in Europe: Current issues in theory and policy. Cheltenham: Elgar.
Büchel, F., & Battu, H. (2003). The theory of differential overqualification: Does it work? Scottish Journal of Political Economy, 50, 1-16.

Büchel, F. (2002). Successful apprenticeship-to-work transitions: On the long-term change in significance of the German school-leaving certificate. International Journal of Manpower, 23, 394-410.
Büchel, F. (2002). The effects of overeducation on productivity in Germany: The firms viewpoint. Economics of Education Review, 21, 263-275.
Daly, M. C., Büchel, F., & Duncan, G. J. (2000). Premiums and penalties for surplus and deficit education evidence from the United States and Germany. Economics of Education Review, 19, 169-178.

Project Team

Felix Büchel
Matthias Pollmann-Schult

Dissertation Project

School Performance, Occupational Choice, and Labor Market Outcomes
(Matthias Pollmann-Schult)