Occupational hazard: Inequalities in labour market mismatch

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).

In previous work, we examined inequalities in the match between young people's educational attainment and their higher education choices, finding large inequalities in the types of courses young people enrolled in, even when they had the same prior achievement. We build on this work by asking whether these inequalities persist - or even compound - when young people enter the labour market. We examine inequalities in the match between young people and their early occupation choices using linked administrative data on education and earnings, matched to survey data on occupations. 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 young people from disadvantaged backgrounds 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. Detailed analysis of the educational pathways these young people take - including their educational choices, test scores and subject choices, cannot fully explain these SES and gender gaps.

Speaker: Gill Wyness, University College London