Same rights different outcomes? Decomposition of differences in over-qualification among mobile EU workers

Abstract

This study contributes to the debate on the determinants of over-qualification among European Union (EU) mobile workers. More specifically, we quantify the impact of observable compositional heterogeneity on the over-qualification gap between mobile workers from new EU member states (EU13) and those from old EU member states (EU15). Using data from the EU Labour Force Survey 2014 Ad Hoc Module, we first identify factors that may determine the likelihood of over-qualification among EU mobile workers through logistic regression models. Next, using a variant of the Blinder–Oaxaca decomposition technique, we measure the effects of heterogeneity on human capital and differential distribution across European labour markets on the differences in over-qualification between these two groups of workers. Our results show that the differences in human capital explain an important aspect of the gap. However, the most important explanation for the disparities between both groups is the distribution of workers across countries clustered according to the type of labour market regulation. Our study reveals that despite the formal equality guaranteed by the EU law there are persistent inequalities in terms of educational–occupational adjustment that are largely (but not exclusively) due to structural and compositional factors.