Education-Job Mismatch: Implications for Individual Earnings and Aggregate Output


Serikbayeva B. Abdulla K.
September 2022Springer Science and Business Media B.V.

Social Indicators Research
2022#163Issue 2723 - 752 pp.

Based on the nationally representative micro-level dataset, the present paper investigates the prevalence of education-job mismatches and their effects on individual and aggregate earnings in Kazakhstan. The analysis shows that the incidence of education-job mismatches varies across both individual and employment characteristics, and, in particular, across industries. We find that relative to being well-matched, vertical and horizontal mismatches have negative effects on individual earnings, while the penalty for being both vertically and horizontally mismatched is the greatest. Importantly, the study develops a theoretical model explaining the link between productivity and mismatch and quantifies the aggregate productivity gains that would result from reducing the levels of education-job mismatches in the labor market. The counterfactual analysis suggests that the country’s output will increase on average by 11.3% if the level of education-job mismatch is reduced across all industries.

Education-job mismatch , Horizontal mismatch , Over-education , Productivity , Vertical mismatch

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