Overeducation, vertical skill mismatch, and employment outcomes among Chinese university graduates: the mediating role of skill utilization

This study examines how overeducation and vertical skill mismatch jointly shape graduates’ employment experiences in China’s rapidly expanding higher education system. It also explores whether skill utilization functions as a behavioural mechanism linking educational mismatch to employment satisfaction and employment quality. Grounded in human capital theory, job, skill matching theory, and social cognitive career theory, the study integrates structural and psychological perspectives into a unified framework. A quantitative survey was conducted with 512 recent graduates from 15 Chinese universities, and a serial mediation structural equation model (SEM) was used to examine the indirect associations of overeducation with employment outcomes through vertical skill mismatch and skill utilization. The results suggest that overeducation is significantly associated with a higher likelihood of vertical skill mismatch, which is in turn related to fewer opportunities for skill utilization. Lower skill utilization is further associated with lower employment satisfaction and employment quality, providing support for a sequential mediation pathway. These findings are consistent with the view that the consequences of higher education expansion may operate through interrelated structural and behavioural mechanisms rather than through direct associations alone. By identifying skill utilization as a key mechanism, the study contributes to graduate employability research and offers practical implications for curriculum design, career guidance, and labour market policy in China.