The detrimental impact of multidimensional labour market mismatch –evidence from a Norwegian graduate survey

Extensive research has investigated the impact of different forms of labour market mismatches; however, many fail to consider the role of multidimensional mismatch, i.e, that different forms of mismatch may occur simultaneously. In this paper, we study the bias arising from not accounting for the correlation between mismatches and the detrimental impact of experiencing multidimensional mismatch. We demonstrate that a substantial overlap can be found between horizontal and vertical mismatch, using a time series from the Norwegian Graduate Survey: 90% of those who experience horizontal mismatch are also overeducated. Neglecting these two measures’ co-occurrence leads to an overestimation of the consequences of each type of mismatch. The association between horizontal mismatch and job satisfaction is reduced by 15% after controlling for overeducation, while the relationship between overeducation and job satisfaction is reduced by 45% once horizontal mismatch is included. Finally, a significant interaction effect arises between horizontal mismatch and overeducation, highlighting the increased vulnerability of individuals facing this special case of double mismatch, as the negative effect surpasses that of individual components.