Education and competence mismatches: job satisfaction consequences for workers

Transcription

1 Educaton and competence msmatches: job satsfacton consequences for workers Educaton and competence msmatches: job satsfacton consequences for workers Lourdes Badllo Amador Departamento de Economía Unversdad Poltécnca de Cartagena Ángel López Ncolás Departamento de Economía Unversdad Poltécnca de Cartagena ABSTRACT Luís E. Vla Departamento de Economía Aplcada Unversdad de Valenca The accuracy of the match n the job-worker parng s analyzed both n terms of educaton and n terms of qualfcaton usng Spansh data from the 2001 wave of the European Communty Household Panel (ECHP). Regardng the ncdence of msmatch stuatons, the results suggest that the educaton match appears to be a rather poor ndcator for the qualfcaton match. In addton, ordered dscrete choce models reveal that they have dfferent consequences n terms of job satsfacton as well. Palabras claves: educaton msmatch; competence msmatch; job satsfacton Clasfcacón JEL (Journal Economc Lterature): C13; J24; J28 Área temátca: aspectos cuanttatvos del fenómeno económco. 1

2 Lourdes Badllo Amador, Ángel López Ncolás and Luís E. Vla 1. INTRODUCTION The abltes, sklls, atttudes and knowledge possessed by workers determne ther levels of professonal competence, whch n turn may be lower or hgher than those requred n ther current jobs. When ths happens, there s a msmatch n terms of competence n the job-worker parng: workers are undercompetent when ther competence levels are lower than those requred n ther jobs, and are overcompetent when ther competence levels exceed those requred n ther jobs. Professonal competence msmatches are economcally relevant snce labour productvty, and thus wages, s lkely dependng on the qualty of the ft between workers capactes and the requrements of the jobs they performs. In the economc lterature, however, a worker s level of formal educaton s most often used as a proxy for hs/her level of professonal competence because the latter s presumably more dffcult to dentfy and measure (Borghans, Green and Mayhew, 2001). Although educaton s not the only mechansm that promotes and develops workers professonal competence, the lterature focused specfcally on competence msmatches s rather scarce. Indeed, a number of papers deal wth competence and educatonal job-worker msmatches as equvalent phenomena n spte of research showng that educatonal msmatches appear to be only weakly related to competence msmatches (Allen and van der Velden, 2001; and Badllo- Amador, Garca-Sanchez and Vla, 2005). Moreover, most papers on job-worker parng only address the pecunary consequences of educatonal msmatches, as t was shown n revews by Groot and Maassen van den Brnk (2000), Hartog (2000) and Rubb (2003). However the nonmonetary consequences of both types of msmatches have seldom been explored. In ths regard, the job satsfacton consequences of educaton msmatches have manly been examned by Hersch (1991), and Battu, Belfeld and Sloane (2000). The former found that overeducated workers and undereducated women are less satsfed than those who have the requred level of formal educaton; the latter concluded that adequately educated workers report hgher job satsfacton. On the other hand, Allen and van der Velden (2001) and Green and McIntosh (2002) found that competence msmatches reduce the probablty of beng satsfed, whle educaton msmatches do not affect workers' levels of job satsfacton. 2

3 Educaton and competence msmatches: job satsfacton consequences for workers Ths paper ams to clarfy the ssue by analyzng the ncdence of both educatonal and competence msmatches n the job-worker parng, as well as ts consequences n terms of job satsfacton n the Spansh labour market. The paper s dvded as follows. Secton 2 descrbes the data and assesses the ncdence of both educatonal and competence msmatches n the Spansh labour market. Secton 3 presents the estmaton models. In secton 4, the results are shown. Fnally, secton 5 summarzes the man results and puts forward the conclusons and mplcatons of our analyss. 2. INCIDENCE OF EDUCATION AND COMPETENCE MISMATCHES Our pece of research used Spansh data from the European Communty Household Panel (ECHP) for The sample, contanng 4,186 vald records for analyss, ncluded workers aged who worked at least 15 hours per week n ther man job, and excluded tranees and all non-pad jobs, as well as those workers wth mssng values n the key varables. To determne the ncdence of competence msmatches, we used workers' selfassessments regardng ther job match when they answer to two questons ncluded n the EUHSP questonnare: () "Have your studes or your knowledge provded you wth the qualfcatons requred to perform your current job?" () "Do you thnk your knowledge or your personal capactes would allow you to perform a more qualfed job?" As shown n Fgure 1, respondents who answered 'yes' to both questons were classfed as overcompetent, because they had surplus of competence to carry out ther current job tasks. On the other hand, workers who answered 'yes' to the frst queston and 'no' to the second one were classfed as adequately competent, snce they were not able to perform a more demandng job, ther capactes beng hgh enough for ther current jobs. Fnally, respondents who answered 'no' to the frst queston were classfed as undercompetent, rrespectve of ther answer to the second queston, because they were not provded wth the competence requred for ther current jobs. 3

4 Lourdes Badllo Amador, Ángel López Ncolás and Luís E. Vla <Fgure 1 about here> The educatonal accuracy n the job-worker parng was establshed through the socalled modal procedure proposed by Kker, Santos and De Olvera (1997). Under ths crteron, the level of educaton requred by a gven job s defned as the modal educaton level among workers n the same category of an occupatonal classfcaton 1. Thus, a worker s adequately educated, overeducated or undereducated when hs/her own level of educaton s, respectvely, equal, hgher, or lower than the formal educatonal mode correspondng to workers n the same job ttle. Table 1 descrbes both educaton and competence msmatches, as well as the other varables used n ths paper. <Table 1 about here> Table 2 shows the dstrbutons of educatonal and competence job-worker matches. The margnal dstrbutons dffer notceably, and the jont dstrbuton reveals that both classfcatons are nconsstent to a hgh extent. In fact, only 36% of workers had the same knd of ft under both classfcaton crtera, as shown n the man dagonal of the table, whch dsplays the proporton of workers who are smultaneously overeducated and overcompetent, undereducated and undercompetent, or adequately educated and adequately competent. The result s consstent wth those obtaned for Span by Badllo-Amador, Garca-Sanchez and Vla (2005) usng a dfferent data set, who also reported that the statstcal assocaton between both types of matches was very low. <Table 2 about here> Consequently, educaton and competence msmatches appear to be two dfferent phenomena that coexst n the labour market, and should not be treated as equvalents, as was done by most of the prevous research. 1. In ths study, the used occupatonal classfcaton s the Internatonal Standard Classfcaton of Occupatons of 1988 (ISCO88) to two-dgt level. 4

5 Educaton and competence msmatches: job satsfacton consequences for workers 3. MODELS We analyzed the non-monetary consequences of competence and educaton msmatches by consderng three dfferent job satsfacton measures: satsfacton wth the job overall (SOJ), wth the type of job (STJ), and wth the wages earned (SW). Each measure entered as dependent varable n the followng three equatons: Λ β 0 + β Year _ School + β OC + β3uc + β ' X + ε (1) Y = ( 1 2 ) Y = Λ ( α + α1year _ School + α2oe + α3ue + α' X ) + 0 μ (2) Λ 3 δ0 + δ Year _ Req + δ Year _ OE + δ Year _UE + δ' X + π (3) Y = ( 1 2 ) where Y represents the correspondng level of satsfacton (SOJ, STJ or SW) of ndvdual on an ordered scale from 1 (very dssatsfed) to 6 (completely satsfed), Λ (). s the logstc probablty functon, and ε, μ and π are the ndependent error terms. Vector X ncludes control varables related to the personal characterstcs of worker, ther human captal, labour status, unemployment record and mgratory moblty. Equatons (1) and (2) studed the effects of msmatches among comparable workers, so equaton (1) ncludes two dummy varables, OC and UC, as explanatory, takng a value of 1 when worker s, respectvely, overcompetent or undercompetent, and a value of 0 otherwse, and equaton (2) ncluded two dummy varables, OE and UE, whch take a value of 1 when the worker s overeducated or undereducated, respectvely, and a value of 0 otherwse. Addtonally, we analyzed the effects of the magntude of educatonal msmatches among workers wth smlar jobs by estmatng equaton (3), whch ncluded the number of years of requred educaton (Year_Req ), and the addtonal years of overeducaton (Year_OE ) or the number of years of undereducaton (Year_UE ) correspondng to ndvdual, whch are determned as follow: Year_School = Year_Req + Year_OE - Year_UE where Year_OE = Year_School - Year_Req f Year_School > Year_Req Year_OE = 0, otherwse Year_UE = Year_Req - Year_School f Year_School < Year_Req Year_UE = 0, otherwse 5

6 Lourdes Badllo Amador, Ángel López Ncolás and Luís E. Vla Coeffcent estmates n ordered dscrete choce models ndcate the drecton of changes n probablty for the extreme levels of satsfacton when the explanatory varables are altered, but not for the ntermedate categores of the dependent varable. In addton, the estmates do not show the sze of such varatons. Accordngly, we calculated the predcted probablty dstrbutons of satsfacton for a reference ndvdual 2, as well as the predcted dstrbutons when the competence match and the educatonal match varables are altered. 4. RESULTS Table 3 shows the predcted probablty dstrbutons of job satsfacton assocated to competence msmatches. In general, msmatched workers, both by surplus and by shortage, were less lkely to be completely satsfed wth ther overall job, wth the type of job they had, and wth ther wages than otherwse comparable workers who were adequately competent. The negatve effects of competence msmatches on job satsfacton were more severe for undercompetent workers than for overcompetent ones. <Table 3 about here> Table 4 show the predcted probablty dstrbutons of job satsfacton related to educaton msmatches. The level of satsfacton for overeducated workers dd not dffer sgnfcantly from that correspondng to adequately matched comparable workers. However, undereducated workers were more lkely to be completely satsfed wth ther overall job and wth the type of job they had than workers wth smlar characterstcs, ncludng the same level of formal educaton, who were adequately educated. On the other hand, the results showed that addtonal years of requred educaton dd not nfluence workers probabltes of beng completely satsfed wth ther overall job or wage, although they ncreased satsfacton 2. The reference ndvdual s a non-sngle man who s a wage-earner wth a ten-year plus tenure n a full tme job n the prvate servces ndustry. He has not been unemployed for 12 months n the past fve years, was born n Span and works n the same regon he was born n. He s well matched competence-wse and hs formal educaton (n equatons (1) and (2)), the level of educaton requred n hs job (n equaton (3)), work experence, workng hours, hourly wage and number of unemployment epsodes are the sample mean values. 6

7 Educaton and competence msmatches: job satsfacton consequences for workers wth ther type of job. The years of educatonal surplus had no sgnfcant effects on any satsfacton dmenson analyzed. So, overeducated workers dd not dffer from ther adequately educated co-workers regardng job satsfacton. The years of undereducaton ncreased the probabltes of beng completely satsfed wth the overall job and wth the wages earned from ths job. Therefore, undereducated workers are n general more lkely to be completely satsfed wth ther jobs than ther co-workers who have the requred educaton. <Table 4 about here> 5. CONCLUSIONES Ths paper analyzes the ncdence, and job satsfacton consequences of educatonal and competence job-worker msmatches n the Spansh labour market. Our purpose s not only to study ths subject, but also to evnce that both types of job-worker matches are dfferent phenomena and therefore, they should not be treated as equvalents, as has occurred mostly n prevously lterature. By lookng at the jont dstrbuton of educatonal and competence match classfcatons, we fnd that only 36% of workers were smlarly classfed under both crtera, whch mples that educaton and competence msmatches are rather dfferent aspects of the accuracy of the jobworker parng. Moreover, the consequences of both types of msmatches for workers appear to be dfferent n terms of job satsfacton. Specfcally, our results suggest: 1) competence msmatches reduce workers job satsfacton, whch mples that both overcompetence and undercompetence are undesrable stuatons from workers vewpont; 2) among comparable workers, the educatonal msmatches are at least as satsfactory as the adequate educaton match among comparable workers, snce educatonal msmatches have a neutral effect, n the case of overeducaton, or even a postve effect, n the case of undereducaton, on job satsfacton; 3) educatonal msmatches have neutral or even postve effects on job satsfacton for workers n jobs wth smlar educatonal requrements. Specfcally, the years of overeducaton have a neutral effect on satsfacton, whle the years of undereducaton have, n general, a postve effect, probably as a consequence of the relatvely hgher wages earned. 7

8 Lourdes Badllo Amador, Ángel López Ncolás and Luís E. Vla To summarze, the general mplcatons of our analyss are that the research strategy of usng educatonal msmatches as a proxy for the study of competence msmatches, as seen n current lterature, may not be accurate because they appear as two dfferent phenomena of labour market. In fact, competence msmatches are a more relevant problem for workers than educatonal msmatches: job satsfacton consequences are negatve for both overcompetent and undercompetent workers, whle these consequences may be even postve for educatonally msmatched workers. 3. REFERENCIAS BIBLIOGRÁFICAS Allen, J. and van der Velden, R. (2001). Educatonal Msmatches Versus Skll Msmatches: Effects on Wage, Job Satsfacton, and On-the-Job Search. Oxford Economc Papers, 53, pp Badllo-Amador, L., García-Sánchez, A. and Vla L.E. (2005). Msmatches n the Spansh Labor Market: Educaton vs. Competence Match. Internatonal Advances n Economc Research, 11, pp Battu, H., Belfeld, C.R. and Sloane, P.J. (2000). How Well Can We Measure Graduate Overeducaton and Its Effects?. Natonal Insttute Economc Revew, 171, pp Borghans, L., Green, F. and Mayhew, K. (2001). Sklls measurement and economc analyss: an ntroducton. Oxford Economc Papers, 53, pp Green, F. and McIntosh, S. (2002). Is There a Genune Underutlzaton of Sklls Amongst the Over-Qualfed?. SKOPE Research Paper 30. Groot, W., and Maassen van den Brnk, H. (2000). Overeducaton n the Labor Market: a Meta-analyss. Economcs of Educaton Revew, 19, pp Hartog, J. (2000). Over-educaton and Earnngs: Where Are We, Where Should We Go?. Economcs of Educaton Revew, 19, pp Hersch, J. (1991). Educaton Match and Job Match. Revew of Economcs and Statstcs, 73, pp Kker, B. F., Santos, M.C. and De Olvera, M.M. (1997). Overeducaton and Undereducaton: Evdence for Portugal. Economcs of Educaton Revew, 16, pp

9 Educaton and competence msmatches: job satsfacton consequences for workers Rubb, S. (2003). Overeducaton n the Labor Market: a Comment and Re-analyss of a Metaanalyss. Economcs of Educaton Revew, 22, pp

10 Lourdes Badllo Amador, Ángel López Ncolás and Luís E. Vla Table 1. Sample Means and Standard Devaton Varables Defnton Mean Standard devaton Educaton & qualfcaton match OC Dummy varable, 1 f worker s overcompetent, 0 otherwse UC Dummy varable, 1 f worker s undercompetent, 0 otherwse OE Dummy varable, 1 f worker s overeducated, 0 otherwse UE Dummy varable, 1 f worker s undereducated, 0 otherwse Year_Req Number of years of requred educaton n a job Year_OE Number of years of overeducaton n a job Year_UE Number of years of undereducaton n a job Personal characterstcs Female Dummy varable, 1 f female, 0 otherwse Sngle Dummy varable, 1 f sngle, 0 otherwse Human captal Experence Number of years of potencal work experence (age-educaton-6) Tenure shorter than 1 year Dummy varable, 1 f tenure s lower than 1 year, 0 otherwse Tenure between 1 and 5 years Dummy varable, 1 f tenure s between 1 and 5 years, 0 otherwse Tenure between 6 and 10 years Dummy varable, 1 f tenure s between 6 and 10 years, 0 otherwse Year_School Number of years of formal educaton completed Labor status Self-employed Dummy varable, 1 f self-employed, 0 otherwse Workng hours per week Average number of workng hours per week Part-tme job Dummy varable, 1 f part-tme job, 0 otherwse Publc sector job Dummy varable, 1 f job n the publc sector, 0 otherwse Agrculture job Dummy varable, 1 f agrculture job, 0 otherwse Manufacturng job Dummy varable, 1 f manufacturng job, 0 otherwse W Hourly wage Unemployment & mgraton Unemployed for 12 months Dummy varable, 1 f worker unemployed for 12 months n the last 5 years, 0 otherwse Unemployed epsodes Number of unemployment epsodes n the last 5 years Regonal mgraton Dummy varable, 1 f worker was not born n the regon where he/she lves Lved abroad but returned Dummy varable, 1 f worker born n Span, lved abroad, and come back, 0 otherwse Internatonal nmgrant Dummy varable, 1 f worker s a foreng nmgrant, 0 otherwse Job satsfacton SOJ Ordered varable from 1 (very dssatsfed) to 6 (completely satsfed) to ndcate the satsfacton wth overall job degree degree degree degree degree degree STJ Ordered varable from 1 (very dssatsfed) to 6 (completely satsfed) to ndcate the satsfacton wth type of job degree degree degree degree degree degree SW Ordered varable from 1 (very dssatsfed) to 6 (completely satsfed) to ndcate the satsfacton wth wage degree degree degree degree degree degree

11 Educaton and competence msmatches: job satsfacton consequences for workers Table 2. Margnal and Jont Dstrbutons of Competence and Educaton Matches (Percentage) Overeducated Undereducated Adequately educated Competence match Overcompetent Undercompetent Adequately competent Educatonal match Table 3. Competence Match: Predcted Probabltes by Degree of Satsfacton from Job Satsfacton Equaton 1 Dependent varable: SOJ Reference ndvdual Year_School + std.e OC UC Dependent Varable: STJ Reference ndvdual Year_School OC UC Dependent Varable: SW Reference ndvdual Year_School OC UC Notes: The reference ndvdual s a non-sngle man who s a wage-earner wth a tenyear plus tenure n a full tme job n the prvate servces ndustry. He has not been unemployed for 12 months n the past fve years, was born n Span and works n the same regon he was born n. He s well matched competence-wse and hs formal educaton, work experence, workng hours, hourly wage and number of unemployment epsodes are the sample mean values. (-) No sgnfcant effect (p>0.05). 11

12 Lourdes Badllo Amador, Ángel López Ncolás and Luís E. Vla Table 4. Educaton Match: Predcted Probabltes by Degree of Satsfacton from Job Satsfacton Equatons Dependent Varable: SOJ Equaton 2 Equaton Reference Indvdual Year_School OE UE Year_Req Year_OE = Year_UE = Dependent Varable: STJ Equaton 2 Equaton Reference Indvdual Year_School + std.e OE UE Year_Req + std.e Year_OE = Year_UE = Dependent Varable: SW Equaton 2 Equaton Reference Indvdual Year_School OE UE Year_Req Year_OE = Year_UE = Notes: The reference ndvdual s a non-sngle man who s a wage-earner wth a ten-year plus tenure n a full tme job n the prvate servces ndustry. He has not been unemployed for 12 months n the past fve years, was born n Span and works n the same regon he was born n. He s well matched educaton-wse and hs formal educaton (n equaton 2), years of requred educaton (n equaton 3), work experence, workng hours, hourly wage and number of unemployment epsodes are the sample mean values. (-) No sgnfcant effect (p>0.05). 12