March 23, 2016

Skill mismatch affects one in three UK workers

Almost a third of workers in the UK are overqualified or underqualified for the jobs they hold, according to analysis published by the Office for National Statistics (ONS).

The ONS figures show that in the final quarter of 2015, only 68.7% of those in employment had a level of education close to the average for their job—the lowest rate for over a decade.

According to the report, 16.1% of workers are overeducated for their job, up from 15.3% two years earlier. Meanwhile, 15.1% are undereducated, up from 14.8%.

The authors of the report comment that: “The reason skills or educational mismatch is important is that it can be an indicator of inefficient allocation of labour within the economy. This can have potential implications for aggregate productivity – for example if overeducated workers could better utilise their skills or qualifications in a more productive occupation.”

But IZA World of Labor author Geraint Johnes of Lancaster University Management School commented that education can still contribute to higher productivity even among overeducated workers, telling the Guardian that: “Workers who are overqualified for their jobs earn, on average, more than other workers in similar jobs. They do therefore benefit from a positive return on their extra education, even though this return is lower than they would earn if their jobs better matched their level of education. This suggests that employers find these more educated workers to be particularly productive in their roles.”

Peter Sloane has written for IZA World of Labor about overeducation, skill mismatches, and labor market outcomes for college graduates. He writes that: “Drawing meaningful conclusions about mismatch, its dynamics, and its relationship to wages, job satisfaction, and job mobility requires panel data, which can reach more nuanced conclusions by allowing for individual differences, e.g. choosing a job because it offers compensation.”

The ONS report can be found here.

Related articles:

Overeducation, skill mismatches, and labor market outcomes for college graduates by Peter J. Sloane
The boom in university graduates and the risk of underemployment by Gustavo A. Yamada
Skill mismatch and overeducation in transition economies by Olga Kupets
Find more IZA World of Labor articles about economic returns to education