By Inga Lass
Close to half of Australians believe they have more education than their job requires, a dynamic that is associated with lower job and life satisfaction.
A quarter of people also cannot fully use their skills and abilities in their current job.
These figures come from the latest annual report from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, released today, with data through to 2024.
It presents new insights on how well people’s educational level, skills and abilities match the jobs they work in.
The HILDA survey has been following the same group of about 17,000 people every year since 2001, which makes it possible to examine how the lives of Australians are changing over time. The survey is one of Australia’s most valuable social research tools.
More education but not using it
Let’s start with the good news. Over the last two decades or so, access to tertiary education has dramatically improved for Australians.
The proportion of people aged 18 to 64 with a bachelor’s degree has increased from about 14 percent in 2001 to almost 22 percent in 2024, making it the most prevalent level of education.
On the downside, people’s educational qualifications, skills and abilities often do not perfectly match their jobs.
The data show that 49.5 percent of workers aged 18 to 64 were overeducated in 2024, meaning they held a higher educational level than they believed is the minimum required to successfully do their job.
In addition, 25.7 percent of workers were “overskilled”, meaning they told us they do not use many of their skills and abilities in their job.
Young people and casual employees are more affected by both of these kinds of mismatch. Certain occupations, like retail workers, labourers and machinery operators and drivers, are also more affected, as well as people working in accommodation and food services.
Why does overeducation matter?
Both overeducation and overskilling are associated with lower job satisfaction, including pay and the work itself, and with lower life satisfaction, our study found.
These workers are also more likely to consider quitting their jobs.
These findings suggest that being unable to make full use of one’s education or skills in the job can lead to feeling bored, unappreciated or underpaid – and thereby hurt overall wellbeing.
And things are not getting any better.
Admittedly, we do see a shift towards more jobs that require higher levels of education.
But that growth has merely kept up with the growth in people’s actual levels of education. So the overall proportion of people experiencing labour market mismatches has remained roughly stable.
What is more, this apparent stability hides structural changes in the labour market towards occupations and industries that tend to have relatively few overeducated workers, such as professional occupations or the health care and social assistance sector. Once we take that into account and compare workers with similar types of jobs, we do see a weak, rising trend in both overeducation and overskilling.
Overeducated workers stay overeducated
The poorer wellbeing outcomes for mismatched workers are all the more concerning because these mismatches can last for a long time.
Of those workers who are overeducated in one year, almost two thirds (65 percent) are still working in jobs for which they are overeducated four years later. And about 40 percent of overskilled workers are still overskilled four years later.
What is more, mismatched workers are more likely to stop working altogether – about 11 percent of overeducated workers and 12 percent of overskilled workers are no longer employed four years later. That compares with only about 8 percent of workers well matched to their jobs.
Inga Lass is a Senior research fellow, The University of Melbourne. This article was first published by The Conversation
