It is generally found that over-skilled workers receive less job satisfaction than their correctly placed colleagues. Over-skilling refers to the mismatch wherein an individual has higher skills than that required for his/her current jobs. The increasing trend of youth to enroll for longer educational courses and the relative scarcity of suitable job opportunities later results in over-skilling. This phenomenon leads to various negative outcomes. In sharp contrast to the lively debate on the economic effects of skill mismatch in Europe, evidence from Japan on this issue is relatively scarce. In this paper, we analyze the effects of over-skilling on job satisfaction in a Japanese company. Our study uses the longitudinal data gathered from an employee satisfaction survey （ES survey） of a Japanese medium-sized company. As expected, there is a negative relationship between over-skilling and job satisfaction in line with previous researches. Over-skilled workers receive significantly lesser job satisfaction than their correctly placed colleagues, after controlling for ability and other potential bias. This suggest that over-skilled workers become less satisfied with their work as a result of being unable to sufficiently realize the full capacity of their productivity. Thus, the empirical results of this study raise a number of important issues for training of Japanese labor force.
