Employment polarization and over-education in Germany, Spain, Sweden and UK

Abstract

The objective of this study is twofold. First, it investigates the association between technological change and over-education by analysing incidence of over-education and its change across skill-based and task-based job categories. Second, it compares countries with different employment change pattern—mainly upgrading and polarizing—to establish a link between employment polarization and over-education. Using data from European Labour Force Survey covering the period from 1999 to 2007, the paper analyses four countries of Europe—Germany, Spain, Sweden and UK. The results suggest higher incidence of over-education in polarized countries—Spain and UK as compared to countries with a somewhat upgrading pattern of employment change—Germany and Sweden. It also reveals that in Spain and UK, over-education is prominent and increasing over time in the low-skill jobs which are mostly non-routine manual in nature, while Germany and Sweden have more over-educated workers in middle skilled routine and high skilled analytical jobs. I find similar results in both descriptive and job fixed effects regressions.