Occupational Hazard: Inequalities in Labour Market Mismatch

• In Event: Unpacking the Education-to-Labor-Market Transition and Its Implications for Inequality

Abstract

Authors: Oliver Cassagneau-Francis (UCL CEPEO), Lindsey Macmillan (UCL CEPEO), Richard Murphy (University of Texas at Austin), Fabien Petit (University of Barcelona), Gill Wyness (UCL CEPEO).
[Note: Gill Wyness is the presenter; unfortunately she was away on leave at the time of panel submission and we did not realize she could not be listed as a presenter without first creating a MemberClicks profile.]

We examine inequalities in the match between young people and their occupation using linked administrative data on education and earnings, matched to survey data on occupations, in the context of the UK. We depart from traditional skills-based measures of occupational mismatch by devising two hierarchical, continuous measures of occupational quality: an “input” measure derived from the initial qualifications of others in that occupation, and an “output” measure derived from the realized wages of others in that occupation. We use these detailed, comparable measures to examine the extent to which individuals mismatch into occupations, for the first time in the literature. We explore the nature of mismatch throughout the ability distribution, focusing on systematic differences by socio-economic status (SES) and gender.

We find that low SES young people are employed in lower wage and lower qualification occupations compared to their similarly qualified but more advantaged peers. While females are employed in slightly higher qualification occupations than men, they are employed in lower wage occupations. Educational routes between compulsory education and occupations at age 25 can explain around a third of the SES gaps among high achievers, but persistent sizeable difference remain, conditional on all post-16 activity. By contrast educational choices explains very little of the gender gap.

A previous working paper version of this paper is currently publicly available: https://repec-cepeo.ucl.ac.uk/cepeow/cepeowp24-06.pdf. The version prepared for APPAM will be expanded and revised with additional data.

Author

• Lindsey Macmillan, University College London
  Non-Presenting Co-Author