1. in the Spanish Labour Market:
The Consequences on Job Satisfaction of Educational and Skill Mismatches
in the Spanish Labour Market:
A Panel Analysis
Lourdes Badillo-Amador †
Ángel López Nicolás ‡
Luis E. Vila ±
† Technical University of Cartagena
‡ Technical University of Cartagena, CRES and FEDEA
± University of Valencia
XXXIII, Symposium of Economic Analysis, Zaragoza, 2008

2. Objective Analysis of the job satisfaction consequences
Educational mismatch
Skill mismatch
Relevance of unobserved heterogeneity
Dynamic structure of workers’ job satisfaction

3. Motivation
Job satisfaction can help to explain the worker’s whole package of both pecuniary and non-pecuniary rewards from work
Job satisfaction can clarify the consequences of job-worker mismatches on benefits from work

4. Motivation
Scarce research has studied the job satisfaction consequences of both educational and skill mismatches, and cross-sectional analyses has been carried out

5. Two strong assumptions under Cross-Sectional analyses
Motivation
Two strong assumptions under
Cross-Sectional analyses
Workers’ observable characteristics are not correlated with unobserved factors that also affect job satisfaction
Job satisfaction has no inter-temporal dependence, which implies that current scores of job satisfaction are not influenced by previous experiences

6. Attrition bias is also taken into account
Motivation
The present study considers Longitudinal analyses in order to allow for unobserved heterogeneity, and state dependence
Attrition bias is also taken into account

7. 2. Job-worker matches: incidence and relationship
Structure
1. Data
2. Job-worker matches: incidence and relationship
3. Models and Method
4. Results
5. Conclusions

8. European Community Household Panel
1. Data
Spanish data
European Community Household Panel
(1994 – 2001)
Excludes
Trainees and workers in unpaid jobs
Those who either did not participate in the first wave or only took part in this one
Sample
Includes
Wage-earners aged between 16 and 64 years who work at least 15 hours per week in their main job
15,685 valid records

9. Education matches: modal definition Adequately educated worker
2. Job-worker matches
Education matches: modal definition
Required education (RE)
Educational mode of workers in the same occupational category
(ISCO88/2digit level)
Adequately educated worker
Worker’s education level = RE
Overeducated worker
Worker’s education level > RE
Undereducated worker
Worker’s education level < RE

10. 2. Job-worker matches
The extend of a worker’s educational mismatch was determined by comparing the number of years of required education by his/her job with the number of years of education level attained
Yrs. Overeducation = Schooling Yrs. – RE Yrs.
If Schooling Yrs. > RE Yrs, 0 otherwise
Yrs. Undereducation = RE Yrs. - Schooling Yrs.
If Schooling Yrs. < RE Yrs, 0 otherwise

11. Skill matches: workers’ self-assessment
2. Job-worker matches
Skill matches: workers’ self-assessment
i) Have your studies or your training provided you with the skills needed for your current type of work?
ii) Do you feel that your skills or personal capabilities would allow you to do a more demanding job than the one you do now?
Yes No i)
ii)
Overskilled
Wrongly skilled
Adequately skilled
Underskilled

12. 2. Job-worker matches
Proportion of skill and education job-worker matches and association degree

13. 3. Models and Method
(1)
(2)
(3)
(i = 1,…,N) (t = 2,…,Ti)

14. (Mundlak, 1978; Wooldridge, 2005) Sustituting (4) in (2) and (3)
3. Models and Method
Parametrization of i
(Mundlak, 1978; Wooldridge, 2005)
(4)
Sustituting (4) in (2) and (3)
(2a)
(3a)

15. (Inverse probability weight estimators)
3. Models and Method
What estimation model can be utilized to estimate the job satisfaction when i is considered?
Attrition bias appears when participants either continues or stop responding to the different survey waves for non-random reasons
Pooled
ordered probit model
Random effect
ordered probit model
Consistent ,
but not efficient
Consistent and
efficient No
Attrition
bias
Inconsistent
(IPW cannot be used)
Consistent with IPW
(Inverse probability weight estimators)
Yes

16. There is Attrition bias if one is significante
3. Models and Method
Attrition bias tests
(Verbeek & Nijman, 1992)
Increasing the models by one of the following variables
There is Attrition bias if one is significante
(Estimation by Pooled ordered probit models with IPW)
Whether or not an individual responds in the next wave
Whether or not an individual answers in all waves
Number of waves that a worker is in the panel

17. Inverse Probability Weight estimators (IPW)
3. Models and Method
Two kinds of
Inverse Probability Weight estimators (IPW)
Probability of response of each individual in each wave
Explanatory variables valued as in the first wave
Explanatory variables valued as in the previous wave

18. Estimation results of job satisfaction. Equation (1)

19. Estimated coefficients for Attrition tests
4. Results
Estimated coefficients for Attrition tests

20. IPW referred to previous wave were preferred
4. Results
Consistent estimates are obtained by Pooled ordered probit model with IPW estimators
IPW referred to previous wave were preferred

21. Estimation results of job satisfaction. Equations 2a and 3a

22. 4. Results
Predicted Probability Distribution of Job Satisfaction for a Reference Individual and Marginal Effects. Equation (3a)

23. Weak relationship between education and skill job-worker matches
5. Conclusions
Weak relationship between education and skill job-worker matches
35% of workers have the same kind of fit under education and skill mismatch criteria
Its association degree is lower than 0.1 in a scale from 0 to 1

24. The cross-sectional analysis is misleading
5. Conclusions
The cross-sectional analysis is misleading
Educational mismatches lost its influence in workers’ job satisfaction after allowing for unobserved heterogeneity
The influence of education mismatch in workers’ job satisfaction is consequence of the unobserved
time-invariant characteristics of individuals

25. Skill mismatches matter to workers
5. Conclusions
Skill mismatches matter to workers
After controlling for unobserved heterogeneity the skill job-workers mismatches still affect negatively to workers’ job satisfaction

26. Persistence of job satisfaction
5. Conclusions
Persistence of job satisfaction
Workers’ current job perception depends on their own previous job satisfaction