Skill Mismatch and Returns to Education in Manufacturing: A Case of India’s Textile and Clothing Industry

Prateek Kukreja

Working Papers from eSocialSciences

Abstract: The paper attempts to measure the incidence and extent of skill/education mismatch and analyse the economic returns/cost to over/under education in one of India’s largest labour intensive industries: Textiles and Clothing (T&C). The study is based on the 68th round of NSS Employment and Unemployment Survey estimates. Using the over-education/required education/undereducation (ORU) models on a cross section dataset of individuals employed (as a regular salaried/ wage employee or as casual wage labour) in India’s T&C industry, it finds that the overall educational mismatch ratio during 2011-12 was to the tune of 67.61%. Further, results indicate that while returns to surplus education is positive, it is less in magnitude as compared to returns to required education, suggesting underutilization of excess education. There’s also a significant wage penalty associated with each deficit year of education.

Keywords: eSS, Skill mismatch; textiles, clothing; over-education; required education; undereducation, excess education, wage penalty surplus education, labour intensive industries, skill education, under education, India. (search for similar items in EconPapers)
Date: 2019-02
Note: Institutional Papers
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