Educational mismatch and the cost of underutilization in Turkish labour markets

Benan Orbay and Yigit Aydede

MPRA Paper from University Library of Munich, Germany

Abstract: There is no guarantee that the right candidate will be matched with the right job in labour markets. If the mismatch is substantial, the surplus education and the deficit in schooling lead to underutilization and a loss in productivity in the economy as a whole. The aim of this study is to understand the importance of these issues for Turkish Economy by analyzing the economic returns of educational mismatch in Turkey. First we explore educational mismatch levels in Turkey for nine different occupation areas in different regions and for different industries using four recent household surveys from 2009 to 2012, which include more than one million observations. Based on this data, we analyze effects of educational mismatch on wages in Turkish labor market by using the ORU models. Results indicate that wage loss of over-educated workers is substantially higher for higher age. Regional ORU estimations show that Istanbul is the region with highest benefit for additional required education. Over-education rewards and under-education penalties are also among the highest for İstanbul. Manufacturing is the industry with the highest population and with the highest wage effects for both over-education and under-education. Among the major occupations, wage effects are in general highest for office clerks. Finally, the cost of underutilization and productivity loss due to educational mismatch is substantial in Turkey.

Keywords: Educational mismatch; economic returns; underutilization; Turkey (search for similar items in EconPapers)
JEL-codes: I20 I26 J24 (search for similar items in EconPapers)
Date: 2015-07-01
New Economics Papers: this item is included in nep-ara, nep-cwa and nep-edu
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/65713/1/MPRA_paper_65713.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:65713

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().