Effect of education–occupation mismatch on happiness

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PurposePrior research mostly focuses on the effect of over-education on happiness, whereas the effect of under-education on happiness has received minimal attention. In addition, no research to date has examined the effect of both over- and under-education on happiness by using a full spectrum of workers. Thus, the purpose of this paper is to fill this research gap.Design/methodology/approachThe ordered probit model is estimated to examine the effect of the education–occupation mismatch on happiness based on 2012 survey data from Taiwan.FindingsThe results generally indicate that over-education positively affects happiness, whereas under-education has a minimal effect. The effect of the education–occupation mismatch on happiness also varies with different age groups. Specifically, over-education positively affects happiness except for workers aged 42 and above, whereas negative effects of under-education are found only among workers aged between 32 and 42 when their social network is insufficiently extensive. Moreover, a worker’s social network as a non-pecuniary factor, rather than income as a pecuniary factor, is a major channel through which education enhances happiness.Originality/valueGiven the limited and mixed evidence on the relationship between over-education and happiness, this study contributes to the existing literature by examining whether and how the education–occupation mismatch (over- and under-education) affects the happiness of workers both directly and indirectly via pecuniary and non-pecuniary factors. The research issue remains unexplored to date. Addressing such a question should help explain the persistent trend in pursuing higher education in Taiwan, although highly educated people may suffer from unemployment and an education–occupation mismatch.Peer reviewThe peer review history for this paper is available at: https://publons.com/publon/10.1108/IJSE-04-2019-0283