Horizontal Mismatch in the Labour Market of Graduates: The Role of Signalling

Polona Domadenik (), Far?nik, Daša () and Francesco Pastore
Additional contact information
Polona Domadenik: University of Ljubljana
Far?nik, Daša: University of Ljubljana

No 7527, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We follow Brodaty et al. (2008) and develop a model within the signalling literature where an employer decides whether to hire a worker or not conditionally on the signals she sends – field and length of study and high education (HE) institution. The empirical design of our paper builds on evidence relative to first labour market entry of graduates to identify a signalling effect of individual and institutional quality of study on individual horizontal match quality. First, based on a matched unique employer-employee dataset we report the extent of horizontal mismatch for graduates of different fields of education for a post-transition economy (Slovenia). Second, we test the signal of HE institutions and above average study duration on the likelihood of a horizontal mismatch separately for each field of education. We find that graduates from specific HE institutions experience significantly higher likelihood to get a job that matches the field of study for social sciences, namely business and administration and to a smaller extent education. On the contrary, HE institutions do not signal skills or abilities in the most technical fields of education (engineering, computing, manufacturing). The above average study duration has mixed effects based on the field of education. It can either signal lower innate ability (i.e. for law graduates) or increased skills due to student work (i.e. computing graduates).

Keywords: horizontal mismatch; signalling; Slovenia (search for similar items in EconPapers)
JEL-codes: I21 J21 J24 J44 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2013-07
New Economics Papers: this item is included in nep-edu, nep-lab, nep-lma, nep-spo and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
https://docs.iza.org/dp7527.pdf (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:iza:izadps:dp7527

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().