Skill Mismatch and Over-qualification in the Enlarged Europe

Every year, the European economy generates a large number of high school and college / university graduates who begin their search for their first job. The transition from school to work can be slow and is often associated with long spells of unemployment. Paradoxically, companies also claim that their posted vacancies cannot easily be filled by the numerous graduate or schoolleaving jobseekers, due to a lack of sufficiently qualified or available labour force. This chapter attempts to measure the magnitude of this mismatch, and provide some suggestions for correcting it. The discussion focuses on the causes and consequences of skill mismatch in the EU-15 using data from the European Community Household Panel (ECHP) for the period 1994-2001. After presenting a short overview of the phenomenon of skill mismatch in the EU-15 economies, the analysis concentrates on the five largest EU-15 countries. The analysis is complemented by focusing on Poland. Finally, this chapter offers new empirical evidence of the labour market consequences of under- and over-education in Poland, and when possible, draws some tentative lines of comparison with the other EU countries.