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

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  • Mahy, Benoît

    (University of Mons)

  • Rycx, François

    (Free University of Brussels)

  • Vermeylen, Guillaume

    (University of Mons)

Abstract

The authors provide first evidence on whether the direct relationship between educational mismatch and firm productivity varies across working environments. Using detailed Belgian linked employer-employee panel data for 1999-2010, they find the existence of a significant, positive (negative) impact of over- (under-)education on firm productivity. Moreover, their results show that the effect of over-education on productivity is stronger among firms: (i) with a higher share of high-skilled jobs, (ii) belonging to high-tech/knowledge-intensive industries, and (iii) evolving in a more uncertain economic environment. Interaction effects between under-education and working environments are less clear-cut. However, economic uncertainty is systematically found to accentuate the detrimental effect of under-education on productivity.

Suggested Citation

  • Mahy, Benoît & Rycx, François & Vermeylen, Guillaume, 2015. "Educational Mismatch and Firm Productivity: Do Skills, Technology and Uncertainty Matter?," IZA Discussion Papers 8885, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp8885
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    More about this item

    Keywords

    educational mismatch; productivity; linked employer-employee panel data; working environments;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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