Educational Mismatch and Internal Labour Markets: Is There Any Relationship?

This paper deals with the existence of educational mismatch and its relationship with internal labour markets in Spain. The empirical work focuses on two related topics: the number of promotions and the subjective probability of being promoted are analysed in order to know whether the mismatch affects intrafirm mobility. A new development here is the use of different measures of mismatch: apart from the conventional dummies (indicating whether an individual is overeducated, adequately educated or undereducated), two measures are constructed, which try to catch the extent of over/undereducation. The research has been carried out using a new data base, the "Structure, Consciousness and Class Biography Survey" ("Encuesta de Estructura, Conciencia y Biografia de Clase", ECBC), launched in Spain in 1991. Our findings suggest that, first, there is an important proportion of overeducation in the Spanish labour market, and second, this mismatch is a non-temporary feature of it, since overeducation is not a good signal at least in internal labour markets.