INTRODUCTION Increased qualification of the workforce is thought to promote positive effects in the economy. However, these effects can be limited when human capital competences in the supply of labor do not match the requirement of competences from the demand side. SCOPE AND PURPOSE This piece of research focuses on the accuracy of the match between human capital competences possessed by workers and those required by jobs. Particularly, it analyzes whether there is a substitution relationship between formal education and on-the-job training, as postulated in Human Capital Theory and so there is not a problem of competence mismatch in the labor market. The problem posed is approached under both the perspective of formal education match and competence match analysis. DATA & METHODS We use data from the Spanish Household Panel Survey corresponding to year 1998. To explore the education match, the definition of the required level of education is based on the modal level within 2-digit ISCO88 occupational classification; the definition match in qualifications is based on workers' self-assessments. The analysis is carried out in terms of a multinomial logit model. RESULTS Preliminary results suggests that workers with higher levels of formal education and lower levels of labor experience tend to have higher probabilities of being overeducated. On the contrary, those who have lower levels of education and higher levels of labor experience tend to have higher probabilities of being undereducated. Even though the results suggest a substitution between education and labor experience, the competence mismatch emerges as a big problem in the Spanish labor market, since it affects some 73% of workers. REFERENCES Alba-Ramírez, A. (1993): Mismatch in the Spain labor market: overeducation?. Journal of Human Resources, vol. 28, no. 2, 259-278. Duncan, G. & Hoffman, S.D. (1981): The incidence and wage effects of overeducation. Economics of Education Review, vol. 1, 75-86. Groot, W. (1993): Overeducation and the returns to enterprise-related schooling. Economics of Education Review, vol. 12, 299-309. García, C. & Malo, M.A. (1996): Desajuste educativo y movilidad laboral. Revista de Economía Aplicada, vol. 4, 105-131. Daly, M. C., Büchel, F. & Duncan, G. J. (2000): Premiums and penalties for surplus and deficit education. Evidence from United States and Germany. Economics of Education Review, vol. 19, 169-178. Kiker, B. F., Santos, M. C. & De Oliveira, M.M. (1997): Overeducation and undereducation: Evidencen for Portugal. Economics of Education Review, vol. 16, 111-125. Ng, Y.C. (2001): Overeducation and undereducation and their effect on earnings: evidence from Hong Kong, 1986-1996. Pacific Economic Review, vol. 6, 401-418.