Workers’ internal locus of control and labour market mismatch

Abstract

This paper examines the relationship between workers’ internal locus of control (ILOC) and education and skill mismatch. Using German survey data, we distinguish subjective and objective education mismatch and self-reported skill mismatch and account for cognitive ability and other relevant confounders. Higher ILOC is associated with lower probabilities of underutilising human capital through overeducation or overskilling, and with a higher probability of being subjectively undereducated. Gender-specific analyses reveal different patterns: among women, higher ILOC is primarily associated with less human capital underutilisation, whereas among men, the clearest association is with subjective undereducation.