Overqualification in Employment

Abstract

There is widespread evidence that many workers have higher qualifications than are needed for their job. This finding of a substantial degree of overqualification should not be the case if, as has often been argued, there has been a consistent upgrading of the skills of the labour force as a result of technological change. It might also be argued that even if overqualification exists, this is a result of a new emphasis on flexible employment and therefore increased labour-market uncertainty: people start careers at a level below the traditional start, and so are initially overqualified. In this case overqualification is only a temporary, life-course phenomenon. Evidence is presented here using BHPS and LFS data to suggest, first, that an upgrading of labour does not adequately describe recent change in employment and, second, that overqualification is not a temporary factor resulting from changed employment practices. We should therefore view overqualification as having some sort of structural causation. One tentatively given explanation is that the social demand for education is causing a bunching of qualifications at the higher levels, which means that employers cannot easily discriminate between different apparent skill levels. As a result they reduce the rewards for such skills.