This thesis explores the incidence, the determinants and the consequences of overeducation and overskilling on individuals and firm performance in Malaysia. Three datasets were utilised: the 2007 Productivity Investment Climate Survey (PICS-2), the 1988 Malaysia Family Life Survey (MFLS-2) and the 2007 Graduate Tracer Study (GTS-07). The PICS-2 focused on overeducation and overskilling in the manufacturing sector whilst the MFLS-2 and GTS-07 highlighted overeducation on married respondents and graduates, respectively. With respect to the incidence, overeducation ranges from 19 to 32% whilst overskilling stands at 29%: moderately overskilled (7%) and severely overskilled (22%). As regards the determinants, workplace characteristics such as firm size, ownership, workforce composition and types of hiring practice play a role on overeducation and overskilling decision. Furthermore, labour market size and greater spatial flexibility, such as access to cars and public transportation, along with the individuals' heterogeneity in ability and skills also influence the overeducation incidence. On top of that, being overeducated increases the probability of being overskilled. In terms of consequences, overeducation and overskilling lead to lower earnings. Ordinary least square (OLS) and the random effects (RE) estimate that the earnings loss due to overeducation range from 2 to 24%, with a range of 2 to 11% for overskilled workers. The degree of overeducation and overskilling matters with the overeducation penalty (GTS-07) being larger for the severely overeducated than for the moderately overeducated, whilst severely overskilled workers (PICS-2) face a greater earnings loss compared with the moderately overskilled. Using a quantile regression, some evidences indicate overeducation and overskilling penalty related to unobserved individual abilities, especially for the males' sample. What is more, the GTS-07 reveals that overeducation leads to a lower job satisfaction and increases the on-the-job search behaviour amongst the overeducated workers. Both negative effects are much higher for the workers who are severely rather than moderately overeducated. As regards firm performance, negative externalities from having mismatched workers at the workplace are observed, as these tend to reduce firm performance. However, these negative externalities are largely contributed by having a higher proportion of overeducated as compared to overskilled workers. Apart from quit rate, overeducation decreased the workplace average pay, labour productivity, output and sales per worker but increased in absenteeism. By contrast, hardly any impact is observed regarding overskilling on firm performance apart from the average workplace pay. This suggests that reducing the incidence of mismatch, particularly educational mismatch in the workplace, is essential in improving firm performance thus remaining competitive domestically and globally. This thesis contributes to the existing literature by providing empirical evidence on the incidence and the consequences of overeducation and overskilling on individuals and firm performance in Malaysia. Similar study remains to be very scarce in the context of a developing country.
| Identifer | oai:union.ndltd.org:bl.uk/oai:ethos.bl.uk:600055 |
| Date | January 2012 |
| Creators | Zakariya, Zainizam |
| Publisher | University of Aberdeen |
| Source Sets | Ethos UK |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
| Source | http://digitool.abdn.ac.uk:80/webclient/DeliveryManager?pid=204519 |
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