The Impact of Surplus Schooling on Worker Productivity

Abstract

Human capital theory suggests that education enhances worker productivity and is reflected in higher individual earnings. We use data from the 1969 Survey of Working Conditions and the 1973 and 1977 Quality of Employment Surveys, and a model derived from the industrial psychology literature, to test the proposition that workers' education in excess of what their jobs require can have adverse effects on job satisfaction and other correlates of worker productivity. Our results support earlier studies that have found surplus schooling has a negative effect on job satisfaction. Our findings also indicate that the negative impact of surplus schooling on job satisfaction and turnover is more significant for workers with a higher level of surplus education. Finally, the negative effects of surplus schooling appear to change over time.

Educational Mismatch and Firm Productivity: Do Skills, Technology and Uncertainty Matter?

“…On the one hand, Hersch (1991) shows that over-educated workers are less satisfied than the other workers, and that over-educated male workers are more ready to quit their jobs. This is confirmed by Tsang et al (1991), except for the relationship estimated for over-educated female workers. Verhaest and Omey (2006), using Belgian data on Flanders covering the period 1999-2002, find that overeducated workers have a higher turnover, but they cannot validate the hypothetic impact of over-education on job satisfaction.…”

“…The first trend of research relies on human capital theory, which infers the effects of over-and under-education on productivity through their effects on wages (Battu et al 1999;Duncan and Hoffman 1981;Rumberger 1987;Mavromaras et al 2010;Sicherman 1991;Van der Meer 2006). The second trend studies the influence of educational mismatch on job satisfaction and other correlates of workers' productivity (Büchel 2002;Green and Zhu 2010;Hersch 1991;Tsang 1987;Tsang et al 1991;Omey 2006, 2009). …”

Determinants of regional differences in rates of overeducation in Europe

“…Overeducated workers may also experience lower levels of job-satisfaction (Tsang et al, 1991;Battu et al, 1999). Moreover, less-qualified workers may be displaced and 'bumped down' in the labour market, or into unemployment, by over-educated workers moving into their occupations, particularly in slack labour markets (Battu and Sloane, 2002).…”

“…Moreover, less-qualified workers may be displaced and 'bumped down' in the labour market, or into unemployment, by over-educated workers moving into their occupations, particularly in slack labour markets (Battu and Sloane, 2002). At the level of the organisations, there is some evidence to suggest that overeducation may be associated with lower productivity (Tsang, 1987) and higher labour turnover, leading in turn to lost investments in recruitment and training (Tsang et al, 1991;Alba-Ramirez, 1993). At the macroeconomic level, overeducation can entail wastage of investment in education and national output is potentially lower than it could be if the skills of overeducated works were fully utilized.…”

Over‐Education and Ethnic Minorities in Britain

“…With respect to job satisfaction higher attained education brings with it higher expectations in terms of challenging and interesting work duties. Incongruity between actual and required education generates worker dissatisfaction (for example, see Tsang et al, 1991). To the extent that higher dissatisfaction generates lower work effort this reduces worker productivity and thus the individual rate of return.…”