Accessible Unlicensed Requires Authentication Published by De Gruyter September 8, 2016

Overeducation, Overskilling and Mental Well-being

Rong Zhu and Linfeng Chen

Abstract

This paper estimates the effects of overeducation and overskilling on mental well-being in Australia. Using fixed-effects (FE) panel estimations, our analysis shows that overeducation does not significantly affect people’s mental well-being. However, overskilling has strong detrimental consequences for mental well-being. Using a panel data quantile regression model with FE, we show that the negative effects of overskilling are highly heterogeneous, with larger impact at the lower end of the distribution of mental well-being. Furthermore, our dynamic analysis shows that the damaging effects of overskilling are transitory, and we find evidence of complete mental well-being adaptation one year after becoming overskilled.

JEL Classification: I21; I31; J24

Acknowledgments

We would like to thank Hendrik Juerges (the Editor), two anonymous referees, Kostas Mavromaras and Peter Sloane, for helpful comments. This paper uses unit record data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey. The HILDA Project was initiated and is funded by the Australian Government Department of Social Services (DSS) and is managed by the Melbourne Institute of Applied Economic and Social Research (Melbourne Institute). The findings and views reported in this paper, however, are those of the authors and should not be attributed to either DSS or the Melbourne Institute.

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Published Online: 2016-9-8
Published in Print: 2016-10-1

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