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

Balzhan Serikbayeva and Kanat Abdulla
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Balzhan Serikbayeva: Nazarbayev University

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, 2022, vol. 163, issue 2, No 9, 723-752

Abstract: Abstract 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.

Keywords: Education-job mismatch; Over-education; Vertical mismatch; Horizontal mismatch; Productivity; J18; H83; H51; I18 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s11205-022-02912-x

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