Educational Mismatch and Wait Unemployment

This work investigates educational mismatch and its interrelationships with individual unemployment duration. By studying unemployment histories of Italian workers we show that overeducated have longer unemployment spells than well matched workers. Using duration models we show that hazard rates of graduates are higher than those of undergraduates only for transitions toward occupations that require the competencies provided by the universities. This process is strictly related to innate ability and geographical location. Our findings are consistent with an interpretation of educational mismatch as a penalizing phenomenon in the individuals' working life associated to long term unemployment. We argue that a policy that gives more relevance to individual ability in the schooling attainment may reduce educational mismatch.