Abstract: The imbalance between supply and demand in higher education and job market is reshaping the employment quality and life opportunities of the highly educated individuals in China. Due to the labor market’s inability to absorb the rapidly growing number of college graduates in a timely manner，the proportion of educational mismatches among the highly educated is rising rapidly. Previous research on educational mismatch has focused on the impact of supply-side characteristics （e.g.，college ranking，field of study，academic achievement，and credentials），but has rarely considered the potential role of demand-side recruiters and their hiring decisions （e.g.，organizational structure，job requirements，and institutional environment）. This article，based on the neo-institutionalism theory，analyzes how the hiring decision processes on the demand side of the labor market affect educational mismatch，and provides an empirical analysis based on the data from the 2023 Conjoint Online Survey Research Experiment in China. The study finds：First，hiring decision processes show a convergent tendency towards a “preference for overqualification”， where employers tend to hire candidates with higher education levels than the jobs actually require. This preference for overqualification is prevalent across organizations of all sizes，leading to the rise of educational mismatch. Second，there is a clear divergence of overqualification preference in organizational hiring by occupation type， experience requirements，and tolerance for error，and this divergency is strongly driven by the logic of efficiency. Third，the overqualification preference in organizational hiring also varies based on type of ownership，type of industry，and urban environment，and this differentiation is governed by the logic of the system. The above findings reveal the mechanism of educational mismatch from the perspective of employers’ decision-making：on the one hand，facing with an oversupply of higher education degrees and high transaction costs in the recruitment process，rationalized organizations try to improve the hiring efficiency and reduce the recruitment risks through overqualification preference. On the other hand，in the face of the social recognition of highly educated people and the conceptual consensus of academic competitiveness in the industrial development，institutionalized organizations use overqualification preference to strengthen their own competitive advantage and to elevate their social status.

Key words: education-occupation matching, employer decision, overeducation, overqualification preference, audit study, neo-institutionalism