Harminder Battu

Overeducation, undereducation and the British labour market

This paper addresses the issue of overeducation and undereducation using for the first time a British dataset which contains explicit information on the level of required education to enter a job across the generality of occupations. Three key issues within the overeducation literature are addressed. First, what determines the existence of over and undereducation and to what extent are over and undereducation substitutes for experience, tenure and training? Second, to what extent are over and undereducation temporary or permanent phenomena? Third, what are the returns to over and undereducation and do certain stylized facts discovered for the US and a number of European countries hold for Britain?

Overeducation among Graduates: A Cohort View.

This paper uses a survey of graduates from two cohort years (1985 and 1990) to examine the determinants of overeducation in the UK. We determine whether or not graduates are matched in jobs for which degrees are required. Longitudinal comparisons up to 11 years after graduation permit examination of how the matching process alters over time. The implications of mismatch for job satisfaction and earnings over the career cycle are traced. We find that cross-sectional measures of mismatch obscure significant changes for individuals over time; that the speed of movement into and out of matched work is important; and that both job satisfaction and earnings are significantly adversely affected by mismatch.

How Well Can We Measure Graduate Over- Education and Its Effects?

Using data from two cohorts of graduates, this article examines three aspects of over-education. First, using three new measures, we present an estimate of graduate over-education in the UK. We find that the scale of over-education varies with measurement techniques, with weak correlations between the three measures. Second, across the three measures we estimate the effects of over-education on earnings and job satisfaction. The effects of over-education on earnings and job satisfaction are similar, not withstanding the measures identifying different individuals as being over-educated. One finding is that the effects of being over-educated are more significant for female graduates than male, although it is ambigu ous which gender is more prone to over-education. Third, we examine another source of ambiguity regarding over education, namely that firms upgrade the tasks they allocate to their employees who appear to be over-educated. We find that, for graduates, job quality for the over-educated is not converging to that of the appropriately educated.

Overeducation and the formal education/experience and training trade-off

For the first time the issue of overeducation is addressed for the UK. Substantial amounts of over and undereducation are found. The evidence supports the view that formal education and other components of human capital are substitutes for the over- and undereducated.

To what extent are ethnic minorities in Britain over‐educated?

For the total population there is evidence of substantial over‐education in the sense that workers possess higher qualifications than are strictly required for the job. Using the fourth wave of the British National Survey of Ethnic Minorities, this paper attempts to ascertain whether ethnic minorities suffer from higher over‐education than whites due to possible discrimination. The results suggest a differential effect across various ethnic groups and a tendency for foreign qualifications to be rewarded less.

Tenure and Employment Contracts: An Empirical Investigation

This paper exploits a unique data set to explore the importance of key contractual characteristics on the duration of employment tenure. The paper recognises the insights of the human capital and job-matching approaches in informing discussion on employment tenure. Nevertheless, this paper argues that features of the contractual arrangements between employer and employee have been under-emphasised. The paper demonstrates that key features of contracts such as job security develop simultaneously with tenure. A clear lock-in effect is observed in the results.

An empirical investigation of Oliver Williamson's 'organization of work'

Oliver Williamson argues that the attributes of the employment contract, like intermediate transactions in general, are essentially driven by the specificity of assets. In the case of the organization of work it is the particular attributes of labour that determines the transaction costs of any given governance structure. The paper presents a stylized account of the transaction cost model of the efficient organization of work, stressing an underlying tension and ambiguity in the transaction cost framework. The paper exploits a unique dataset to test, for the first time with British data, Williamsons transaction cost predictions concerning the nature of employment contracts. Williamson tacitly assumes that asset specificity is exogenous in general. However, there is evidence in the literature that labour specificity is endogenous to employment contracts. The paper endeavours to demonstrate that there is empirical evidence to suggest that specialized labour is indeed endogenous in the transaction cost model. The major implication is that the organization of work cannot be considered as an example of the efficient organization of intermediate transactions.