In today’s current state, where more and more college graduates are choosing to pursue higher education, the market for labour is becoming more and more competitive. Overeducation is described as an employee possessing a higher education level than required for his or her current occupation, thus, resulting in an inefficient use of human capital. Overskilling is when an employee possesses more than the necessary skills required to perform adequately in his or her current occupation. Both occurrences have positive and negative consequences. Some theories, such as the job competition theory and signalling model, suggest that firms are more inclined to hire applicants who have higher degrees of education. This is one possible example of how the phenomena of overeducation and overskilling can come about. Some theories, such as the human capital and career mobility theories suggest that overeducation and overskilling are only short-term occurrences due to a potential investment that workers make in the early stages of a career path. Still, other theories claim that overeducation and overskilling are linked to a lack of mobility such as migrating or commuting (Linsely 2005). Despite the wide array of possible causes for overeducation and overskilling, the consequences of the two reflect wages that are sub-par for the employee’s education level, and low levels of job satisfaction, respectively. This however, can decrease with age and tenure, supporting the possibility that overeducation and overskilling are mere short-term hurdles that an employee must face (Groeneveld and Hartog 2003, Linsley 2005, McMillen, Seaman and Singell 2003). The first, and most obvious question is why might it be beneficial or disadvantageous to be overeducate...
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