Do wages and job satisfaction really depend on educational mismatch? Evidence from an international sample of master graduates

The purpose of this paper is to find econometric evidence of a negative influence of educational mismatch on either wage or job satisfaction, once potential sources of bias are adequately considered. The analysis attempts to answer the question: do wage or job satisfaction really depends on educational mismatch?

The paper uses a panel data of 1690 early career Master graduates from Università della Svizzera italiana (USI), Switzerland. First, a wage equation with dummies representing educational mismatch and other control variables is estimated. On the other hand, a regression in which the dependent variable is the degree of self-assessed job satisfaction is run in order to identify the effect of mismatch on job satisfaction.

The analysis finds no robust econometric evidence of a negative influence of educational mismatch on either wage or job satisfaction, once potential sources of bias are adequately considered.

The estimates have been conducted on a specific sub-population, i.e. a limited sample of Master graduates from a single Swiss university in the years 2006–2016; it is then not straightforward that results can be generalised to the whole population.

The influence of educational mismatch on job satisfaction has been extensively studied in the previous literature; however, most of the existing studies are likely to report biased results due to unobserved heterogeneity and measurement error. The authors address these two serious econometric issues by proposing a new instrumental variable for a self-assessed mismatch, i.e. time spent in job search after graduation.