The Influence of Overeducation on Chinese Workers’ Job Satisfaction from China Household Tracking Survey (2014–2018)

Overeducation means that the rapid growth in the numbers of secondary and higher education graduates begins to exceed the actual demand of the labor market due to this excessive expansion of education. Consequently, educated workers are faced with knowledge unemployment, or are engaged in jobs that do not match their academic qualifications, resulting in a decline in income and a waste of educational resources. In order to explore the effect of overeducation on workers’ job satisfaction, we selected data from China Household Tracking Survey (CFPS) and conducted a fixed-effect ordered logit model regression analysis. It was found that overeducation has a negative impact on employees’ job satisfaction and an impact on wage penalty. Wage income has a mediating effect on the relationship between overeducation and job satisfaction. We present three policy suggestions: for the Government’s administration department, it is necessary to actively create an environment for matching education and occupation; to improve the possibility of matching education and occupation; and to reduce the negative effect of labor contracts on the improvement of human capital and the job satisfaction of overeducators by adjusting the flexibility and stability of the labor contract. For institutions of higher learning: it is necessary to make forward-looking adjustments to the educational structure, according to the actual needs of economic and social development to adapt to the social demand for talent and development trends; to train highly skilled and high-quality workers needed for social development; and to reduce the unreasonable distribution of resources caused by overeducation. For enterprises: employees should be guided to correctly understand the unpredictable relationship between education and work and reasonably reduce the job expectations of new employees, according to their own work experience and technical level.