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cancies, countries show a varied pattern in this respect. In countries such as the UK and Germany, studies have found overeducation to be more pronounced than undereducation, while in the Netherlands and Spain, some studies have found the opposite (see for countryspecific studies Dolton amp。 Vignoles, 1998。 Groot, Maassen amp。 Brink, 2021。 AlbaRamirez, 1993。 AlbaRamirez amp。 Bl225。squez, 2021。 See also the overview by Sloane, 2021). Theoretical Background The human capital theory was developed in the early 1960s to explain the relationship between individuals’ level of schooling and their earnings in the labour market. Education develops skills (‘human capital’) that make graduates more productive in their jobs and this is reflected in higher earnings (Becker, 1964。Mincer, 1974). The human capital theory is based on three main propositions(Rumberger, 1994): 1 the primary role of formal schooling is to develop the human capital, or the knowledge and skills, of future workers。 2 the labour market efficiently allocates educated workers to firms and jobs where they are required。 3 the human capital of workers increases their productivity in the workplace which is then rewarded with higher earnings. Although this theory has been well supported by the results of research, it has been criticised. Some of the main criticisms have e from scholars who emphasise the demand side of the labour market. One such criticism is that it ignores important qualitative differences in the types of knowledge and skills produced in higher education. Although the theory acknowledges differences in general skills that can be applied to a wide variety of jobs, there are important independent dimensions to human abilities and skills that cover not only the cognitive area, but also the physical and social areas (Gardner, 1983). Another criticism is the effects of mismatches between graduates’ acquired skills levels and those that are required in the workplace. They are thought to have adverse effects on both productivity and earnings. More than the standard human capital model, the job assignment model is very explicit about the relevance of the demand side of the labour market. This model as developed by Sattinger (1993) is based on the proposition that there is an allocation problem in assigning heterogeneous workers to jobs that differ in their plexity. The allocation is regarded as optimal when the most petent workers are assigned to the most plex job and the less petent workers are assigned to simpler jobs. In other words, if you can get the right person in the right place, you will optimise earnings, productivity gains, job satisfaction, etc. In the case of a mismatch, the limitations of the worker or the job impose an unnecessary restriction on the productivity that can be achieved. Employees working below their educational level will find that the characteristics of the job impose a limitation to the use of their skills and therefore to productivity and earnings. Conversely, employees working in a job above their level will lack some of the skills needed to realise the productive potential of the job. An important assumption of the assignment model is that different categories of education and jobs can be characterised as having fixed levels of available and required knowledge and skills. In other words, educational mismatches imply skill mismatches. Although the assignment model in itself seems highly plausible, this basic assumption can