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27. September 2012

SOEP Brown Bag Seminar

SOEP Brown Bag Seminar: Dead Man Walking: The Impact of Over-Education on Life Satisfaction
Dead Man Walking: The Impact of Over-Education on Life Satisfaction


27. September 2012


DIW Berlin im Quartier 110
Room 5.2.010
Mohrenstraße 58
10117 Berlin


John P. Haisken-DeNew (MIAESR, University of Melbourne)

The negative effects of unemployment on wellbeing have been clearly documented in the economics literature. However some current employees may move directly into a new job, never experiencing an unemployment spell, yet find themselves in a new job underutilising their skills or education ("downchanges"). We assess empirically, whether downchanges are similar to unemployment spells, in that they both decrease measures of wellbeing, controlling for observables and time-invariant unobservables. Theoretically persons should only make job moves that are pareto optimal. However, we find significant negative impacts of downchanges on wellbeing amounting to about a quarter of the magnitude of being unemployed, and consider this to be a form of as "hidden unemployment". This suggests that labour market participants prefer a poorer match at their new job than remaining at their old job entering into unemployment, suggesting some kind of forcing out of the old job.