General Seminar - Gill Wyness

Occupational hazard: Inequalities in labour market mismatch

Abstract: In this paper we depart from traditional skills-based measures of occupational mismatch, proposing a new hierarchical method. Specifically, we compare individuals’ educational ‘ability’ to their occupation ‘quality’. To do so, we create two continuous measures of occupational quality: an ‘input’ measure derived from the initial qualifications of others in an occupation, and an ‘output’ measure derived from the realized wages of others. We use these detailed, comparable measures to examine the extent to which individuals mismatch into occupations, for the first time in the literature. We explore the nature of mismatch throughout the ability distribution, focusing on systematic differences by socio-economic status (SES) and gender. We find low SES individuals are employed in lower wage and lower qualification occupations compared to their similarly qualified peers, while women are employed in lower wage occupations than men. Neither detailed administrative data on educational pathways, nor survey data on work-based preferences can explain these gaps.