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This paper relaxes the assumption of homogeneous skills among graduate workers and proposes a new approach to differentiate between real and apparent overeducation based on the level of cognitive skills actually achieved by the individuals. This proposal is applied to the study of the wage effects of overeducation in the Spanish labor market using data from PIAAC. The results suggest that between a quarter and a half of the graduate workers who appear to be overeducated in the Spanish labor market could be considered as being only apparently overeducated since they show a lower level of skills than that corresponding to their educational level or, alternatively, a level of cognitive skills which is commensurate with their job. Different returns are found for each group of overeducated individuals both when compared with adequately educated peers within a similar level of education (with greater wage penalties for apparently overeducated workers) and when the comparison is done with wellmatched co-workers doing a similar job (with a wage premium for real overeducation but no significant returns for apparently overeducated workers). These results point to the need of taking account of skills heterogeneity within an educational level when returns to overeducation are analyzed.

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Purpose The purpose of this paper is to analyze the effects of labor mismatches on wages and on job satisfaction for the Spanish case, with a distinction been made between educational and skills-related measures of mismatch. Design/methodology/approach The focus is placed on the usage that the individuals do of their skills in the workplace and different measures of skills use are considered to check the robustness of the results. Findings Using data from PIAAC, the results suggest that whereas educational mismatch shows greater effects on wages, the effects of labor mismatch on job satisfaction are better explained by the relative use of individual skills in the workplace. Research limitations/implications Both educational and skills mismatches are relevant for understanding the economic effects of labor mismatch. Nevertheless, it should be taken into account that educational mismatch is not an accurate proxy for skills mismatch, mainly when the non-monetary effects of labor mismatch are addressed. Practical implications There is room to increase workers’ skills utilization in the workplace, which, in turn, would contribute to enhance individual job satisfaction and, consequently, workers productivity. Social implications A process of upgrading in the Spanish labor market would allow to take full advantage of recent investments in education and skills formation done in the country in the last decades. Originality/value This study contributes to the literature on labor mismatch by explicitly considering that educational and skills mismatch might reflect different phenomena and by analyzing the effects of both types of mismatches on different labor market outcomes.