Ability Mismatch and Early Career Success
by Julie Cullen
Abstract: How does being over- or under-qualified at the beginning of a worker’s career affect further skill acquisition, retention, and promotion? We overcome concerns about self-selection into occupations in the context of the US Air Force, which allocates enlistees to over 130 different jobs based, in part, on test scores. Using these test scores, we create simulated job assignments based on factors outside of an individual’s control: the available slots in upcoming training programs and the quality of other recruits entering at the same time. These factors create quasi-random variation in job assignments and hence how cognitively demanding individuals’ jobs are relative to their own abilities. Our instrumental variables estimates reveal sizable and asymmetric effects of being over- versus under-qualified relative to the typical person in the same job.