Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/185304 
Year of Publication: 
2018
Series/Report no.: 
IZA Discussion Papers No. 11844
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Does over-education assist or hinder occupational advancement? Career mobility theory hypothesizes that over-education leads to a higher level of occupational advancement and wage growth over time, with mixed international empirical evidence. This paper re-tests career mobility theory directly using a rich Australian longitudinal data set. A dynamic random effects probit model is employed to examine upward occupational mobility, considering two-digit occupational rank advancement and wage growth over three-year intervals. The 'Household, Income and Labour Dynamics in Australia' data across nine years are employed, and a Mundlak correction model is adopted to adjust for unobserved heterogeneity effects and potential endogeneity, both of which are important to over-education analysis. Contrary to career theory, the results point to job mismatch as an economic concern rather than a passing phase, regardless of whether or not workers are skill-matched. Results further show the importance of adjusting for endogeneity.
Subjects: 
labour market
over-education
over-skilling
career mobility
occupational mobility
wage growth
JEL: 
J24
J31
J60
Document Type: 
Working Paper

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