Exploring the relationship between educational mismatch, earnings and job satisfaction in the tourism industry

Abstract

This article analyses the interrelationship between educational mismatch, wages and job satisfaction in the Spanish tourism sector in the first years of the global economic crisis. It is shown that there is a much higher incidence of over-education among workers in the Spanish tourism sector than in the rest of the economy despite this sector recording lower educational levels. This study estimates two models to analyse the influence of the educational mismatch on wages and job satisfaction for workers in the tourism industry and for the Spanish economy as a whole. The first model shows that in the tourism sector, the wage penalty associated with over-education is approximately 10%. The second reveals that in the tourism sector the levels of satisfaction of over-educated workers are considerably lower than those corresponding to workers well assigned. With respect to the differences between tourism and the overall economy in both aspects, the wage penalty is substantially lower in the case of tourism industries and the effect of over-education on job satisfaction is very similar to that of the economy as a whole in a context where both wages and the private returns to education are considerably lower in the tourism sector.

Keywords:

• educational mismatch
• job satisfaction
• wages
• over-education
• crisis

Acknowledgement

This work was supported by the Spanish Ministry of Economy and Competitiveness under Grant CSO2011-29943-C03-02 (National R&D&I Plan).

Notes

1. The average contribution of tourism in OECD countries is 4.2% of GDP and 5.4% of employment (in the case of the European Union, these figures are 4.4% and 5.7%, respectively) (OECD, 2012).

2. This is notably the case of the sub-sector of bars and restaurants, that concentrates a large share of tourism employment, although in other cases such as transport via railways and air transport, the productivity is relatively high (Blake, Sinclair, & Campos Soria, 2006; Instituto de Estudios Turísticos, 2013).

3. This evidence has been, however, challenged recently by Kampelmann and Rycx (2012), whose results based on the analysis of linked employed–employee panel data for Belgium suggest that additional years of over-education could indeed be beneficial for firm productivity due to the additional skills and capabilities acquired through schooling.

4. Marchante, Ortega, and Pagán (2005) estimate for a sample of hotel and catering workers (data referring to an own survey carried out in Andalusia) an over-education of 61.5% when only university graduates employed in the sector are contemplated.

5. Since this specification includes variables related to both individual characteristics and regional characteristics, we applied a correction for arbitrary intra-region correlation, which was implemented using the ‘cluster option’ in STATA. This option allows considering the fact that observations are clustered into regions, and that they may be correlated within them, but would be independent between regions.

6. According to Halvorsen and Palmquist (1980) calculated as (exp β₂ − 1) × 100.

7. The Wald test confirmed the significance at 1% level of the difference between the estimations of the over-education parameter for tourism and total sample (F(1, 16,253) = 91.76; Prob > F = 0.0000), and a similar conclusion is reached with regard to the education parameter (F(1, 16,253) = 1057.18; Prob > F = 0.0000).

8. One rather technical explanation for this could also be related to the way education mismatch is measured here, i.e. there is not a count of the years of over-education but a fictitious variable that reflects the existence of the phenomenon according to the worker's self-assessment with regard to his/her job's requirements. If the average years of over-education among those being over-educated in the tourism sector are in fact lower than those of the comparable group of workers in overall economy, then the lower wage penalty could simply reflect this fact.

9. In addition, needing different training has a very negative effect on levels of satisfaction.