Skills mismatch and wage inequality: evidence for different countries in Europe

Abstract

This paper studies the relationship between mismatch between workers’ skills and labour market requirements throughout different European Countries. It reports evidence that in several countries, over-skilled people tend to have a wage penalty and under-skilled people tend to have a premium. Interestingly, despite the typical effects of education, tenure, experience, and gender in wages being very similar, the effects of mismatch between skills and labour market requirements differ considerably across the wage distribution and the European Countries.

Keywords:

• education
• educational mismatch
• wage inequality

JEL Classification:

• I21
• J31
• O52

Additional information

Notes on contributors

Marcelo Santos

Marcelo SANTOS. He has a Master's in Economics and is a PhD Student in Economics at Universidade da Beira Interior, Covilhã, Portugal, being also affiliated with CEFAGE-UBI research unit. His research interests lie in the areas of economic growth and development and labor economics.

Tiago Neves Sequeira

Tiago Neves SEQUEIRA. He has a PhD in Economics (Nova School of Business and Economics). He has been working on the theory of Endogenous Economic Growth and on empirical applications of that theory. He is currently employed at Universidade da Beira Interior, Portugal, being also affiliated with CEFAGE-UBI research unit. His research interests lie in the areas of macroeconomics (economic growth and business cycles), economics of education and applied economics.