Is there a Genuine Under-utilisation of Skills Amongst the Over-qualified?

Abstract

Two theories of over-qualification are considered, namely mismatch, whereby workers do not find the most appropriate jobs for their skills, because of imperfect information or labour market rigidities, and ‘heterogeneous workers’, whereby individuals with the same qualifications have different actual skill levels, so that they can be over-qualified in terms of formal qualifications, while their skills are actually appropriate for the jobs that they do. The evidence suggests that both theories are relevant in certain situations.