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This article examines the effects of discrimination based on race, ethnic background, nationality, religion, sex, age, disability and sexual orientation on skill underutilization and under-skilling in 30 European countries. People who experienced a variety of forms of workplace discrimination were more likely to report over-skilling, defined as having skills for more demanding roles than required for their job. Paradoxically, some forms of labour market discrimination were also linked to under-skilling, where people report requiring more training to fulfil their job role. The findings are explained in terms of how discrimination in the labour market can have differential impacts on access to career progression and training opportunities across organizations. Differences between self-report and statistical estimates of discrimination are observed. Broader implications for the interpretation of statistical models in discrimination research are discussed.