Allen and van der Velden (2001) examine the effects of educational mismatches and skill mismatches on wages, job satisfaction, and on-the-job search. Educational mismatches occur when individuals have a level of education that does not match the requirements of their job, while skill mismatches refer to the mismatch between the skills an individual possesses and those required for their job. The study finds that educational mismatches have a strong effect on wages, with overeducation (working in a job requiring less education than one has) leading to lower wages, while undereducation (working in a job requiring more education than one has) leads to higher wages. However, these wage effects are not explained by skill mismatches. Instead, skill mismatches are better predictors of job satisfaction and on-the-job search behavior. Skill underutilisation (working in a job where one's skills are not fully used) is negatively associated with job satisfaction, while skill deficits (lack of necessary skills) do not significantly affect wages. The study also finds that skill mismatches have a strong impact on job satisfaction and on-the-job search, whereas educational mismatches do not. This suggests that the relationship between education and job characteristics is not the only factor influencing labor market outcomes. The findings challenge the assignment theory, which posits that educational mismatches imply skill mismatches. Instead, the study shows that skill mismatches are distinct from educational mismatches and have their own effects on labor market outcomes. The results highlight the importance of distinguishing between schooling and skills in understanding labor market dynamics.Allen and van der Velden (2001) examine the effects of educational mismatches and skill mismatches on wages, job satisfaction, and on-the-job search. Educational mismatches occur when individuals have a level of education that does not match the requirements of their job, while skill mismatches refer to the mismatch between the skills an individual possesses and those required for their job. The study finds that educational mismatches have a strong effect on wages, with overeducation (working in a job requiring less education than one has) leading to lower wages, while undereducation (working in a job requiring more education than one has) leads to higher wages. However, these wage effects are not explained by skill mismatches. Instead, skill mismatches are better predictors of job satisfaction and on-the-job search behavior. Skill underutilisation (working in a job where one's skills are not fully used) is negatively associated with job satisfaction, while skill deficits (lack of necessary skills) do not significantly affect wages. The study also finds that skill mismatches have a strong impact on job satisfaction and on-the-job search, whereas educational mismatches do not. This suggests that the relationship between education and job characteristics is not the only factor influencing labor market outcomes. The findings challenge the assignment theory, which posits that educational mismatches imply skill mismatches. Instead, the study shows that skill mismatches are distinct from educational mismatches and have their own effects on labor market outcomes. The results highlight the importance of distinguishing between schooling and skills in understanding labor market dynamics.