We examine graduates’ skill mismatch in the UK focusing on unobserved abilities and academic background, including a distinction between UK and foreign degrees. Approximately 30% of graduates in the UK are overqualified. Among UK-educated graduates, the incidence of overqualification is considerably lower, independent of graduates’ nationality. Studying in a UK institution increases the chance of a good job match and has a positive effect on wages. Studying at more selective institutions and graduating with a first-class degree also promote good job matches and higher earnings. Our results suggest that improving graduates’ skills, and a better match between foreign graduates and occupations, could be effective in reducing the skill mismatch.
