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The Indian Journal of Labour Economics

, Volume 62, Issue 3, pp 389–411 | Cite as

Effect of Education–Occupation Mismatch on Wages in India

  • Banantika DattaEmail author
  • Udaya S. Mishra
Article
  • 17 Downloads

Abstract

This paper investigates the effect of educational levels on wages across different occupational groups. The existing literature relating to this topic concludes that returns to surplus schooling are less than that of ideal level of schooling required for a job. This observation is not in accordance with the theory of human capital. Many authors observe that workers who are over-educated for a job are paid less than their counterparts (with ideal education level) who are in a job for which they are adequately educated. However, such observations are limited to developed countries and have not been empirically validated in the case of developing countries. Thus, this is an attempt towards analysing the effect of education, especially over-education as regards its bearing on wages in the Indian labour market. This study delves deeper into unfolding the education-wage nexus within each of the seven occupational groups defined for this study. Realised Matches method is used for calculating the over and under-educated for each occupational group. It is found that there is an agreement with human capital theory among all occupational categories in India.

Keywords

Skill mismatch Over-education Returns to surplus schooling Human capital theory 

JEL Classification

I26 J31 J24 

Notes

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Copyright information

© Indian Society of Labour Economics 2019

Authors and Affiliations

  1. 1.Indian Institute of Management BangaloreBengaluruIndia
  2. 2.Centre for Development StudiesTrivandrumIndia

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