Skills use in the workplace and its effects on wages and on job satisfaction

Purpose – The purpose of this paper is to analyze the effects of labor mismatches on wages and on job satisfaction for the Spanish case, with a distinction been made between educational and skills-related measures of mismatch. Design/methodology/approach – The focus is placed on the usage that the individuals do of their skills in the workplace and different measures of skills use are considered to check the robustness of the results. Findings – Using data from PIAAC, the results suggest that whereas educational mismatch shows greater effects on wages, the effects of labor mismatch on job satisfaction are better explained by the relative use of individual skills in the workplace. Research limitations/implications – Both educational and skills mismatches are relevant for understanding the economic effects of labor mismatch. Nevertheless, it should be taken into account that educational mismatch is not an accurate proxy for skills mismatch, mainly when the non-monetary effects of labor mismatch are addressed. Practical implications There is room to increase workers’ skills utilization in the workplace, which, in turn, would contribute to enhance individual job satisfaction and, consequently, workers productivity. Social implications – A process of upgrading in the Spanish labor market would allow to take full advantage of recent investments in education and skills formation done in the country in the last decades. Originality/value – This study contributes to the literature on labor mismatch by explicitly considering that educational and skills mismatch might reflect different phenomena and by analyzing the effects of both types of mismatches on different labor market outcomes.