Educational mismatches versus skill mismatches: Effects on wages, job satisfaction, and on-the-job search

Education-job mismatches are reported to have serious effects on wages and other labour market outcomes. Such results are often cited in support of as signment theory, but can also be explained by institutional and human capit al models. To test the assignment explanation, we examine the relation betw een educational mismatches and skill mismatches. In line with earlier resea rch, educational mismatches affect wages strongly. Contrary to the assumpti ons of assignment theory, this effect is not explained by skill mismatches. Conversely, skill mismatches are much better predictors of job satisfactio n and on-the-job search than are educational mismatches.