• Skill Mismatch
• Job Polarization
• Overeducation
• Employment Protection

I study the reallocation of workers in a labour market characterized by rising job polarization and declining employment protection, with a particular attention to mechanisms of skill-mismatch and overeducation. I first present evidence of the general deterioration of employment in middle-wage, routine occupations over the period 1992-2016 using the European Labour Force Survey (EU-LFS). We then focus on the Italian case to study the increase in low-skill jobs. The increase is primarily driven by changes in the propensity to work in low-skill jobs for individuals from a small set of demographic groups. Through a decomposition analysis, I am also able to address to what extent these changes are affected by structural changes in the composition of population, which is aging and gaining higher educational attainment. We find evidence that both young and prime age high educated men and women consistently account for this increase: we are interested in understanding the role of labour market flexibility in favouring overeducation and skill-mismatch in Italy. We use the Italian LFS, carrying out our analysis adopting panel spatial econometrics techninques on a regional level.