The effects of training and overeducation on career mobility in a segmented labour market

This paper analyses the effects of both training and overeducation on upward mobility in the internal labour market, the professional market and the “supplementary labour market”. The latter segment can be considered as a broadly defined secondary labour market as it is not restricted to the low‐level unskilled jobs only. This broader definition – also found in initial segmentation theory – allows for the changed character of the secondary labour market in the industrialized countries. As expected, “career training” influences upward mobility positively. However, contrary to the predictions of segmentation theory, particularly in the supplementary labour market career training is a means of gaining promotion to a higher level job. Overeducation also affects upward mobility positively, which indicates that overeducation is to some extent a temporary phenomenon at the individual level. However, this also holds in particular in the supplementary segment of the labour market. The estimation results show that the supplementary labour market is less of a dead end than the segmentation theory predicts and is a more valuable place to get training than has been recognized. The supplementary market probably plays an important role in the transition process between initial education and the labour market. Although workers may be initially overeducated in their first jobs, a supplementary segment job could be an attractive step towards reaching a more suitable position in the labour market.