How Persistent Is the Occupation-Education Mismatch in Canada?

This paper investigates the duration of overqualification in Canada, the time-varying probability of leaving overqualification, and the wage consequences associated with the transition. The paper also applies a survival analysis approach to examine the impact of key driving factors on the probability of transitioning from overqualification to a job match using a proportional hazard (Cox) model. The analysis shows that within a 5-year period, an overqualified worker has a 22 percent probability of transitioning to an occupation that matches the education level. The probability of transition also decreases quickly over time, thus lowering the chances of finding a job match after 12 months. Regression analyses also provide evidence that overqualified workers with short tenure are more likely to transition than workers with medium to long tenure. Finally, job-related training nearly doubles the chance of transitioning out of overqualification.