Skip to main content

Advertisement

SpringerLink
Log in

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

  • Original Research
  • Published:
Social Indicators Research Aims and scope Submit manuscript

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.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. The terms “education-job mismatch” and “educational mismatch” are used interchangeably throughout the paper.

  2. This study except for the part on the effects of educational mismatch on aggregate output is part of the PhD thesis.

  3. In the current paper we use the terms “vertical mismatch” and “overeducation” interchangeably. The rationale for excluding two other categories of responses on the vertical mismatch question is provided in Sect. 4.

  4. Source: The Bureau of National Statistics (BNS).

  5. Source: The Bureau of National Statistics (BNS).

  6. Source: World Bank, World Development Indicators databank.

  7. Source: World Bank, World Development Indicators databank.

  8. We think of \(\tau _{jM}\) as representing a friction due to a particular type of educational mismatch that affects the cost of choosing a particular industry of employment. As such, \(\tau _{jM}\) can reflect productivity changes experienced by different types of mismatched workers in different industries. For example,a librarian might be less productive as an applications developer than as a database administrator.

  9. The derivation of the result can be found in Hsieh et al. (2019).

  10. Some other studies that used an augmented Roy model include Hsieh et al. (2019) and Abdulla (2019). While these papers focus on the role of gender and racial differences in employment in explaining observed gaps in earnings, the focus of the current study is on the impact of education-job mismatch on productivity.

  11. Efficiency units are the total amount of human capital available for production, which is a product of the number of workers who possess human capital and their skill level.

  12. We have included Table 11 in the Appendix which illustrates the sample size before and after dropping missing income observations from the analysis across survey years as the main variable that affects the sample size is earnings. Starting from 2016, income isn’t reported by many observations. Since the study investigates individuals who are strongly attached to the labor market and those with non-zero earnings, we exclude individuals with missing income and zero values.

  13. Tenge is the national currency of Kazakhstan, which was introduced in 1993.

  14. The skill intensity of the industries is determined using the average education level of workers across industries. The industry groups are defined according to the average education level of workers as follows: lower-skill industries with the average years of education less than or equal to 13 years; higher-skill industries with the average years of education above 13 years. The industry groups defined by skill level are given in Table 10.

  15. While higher educational attainment is generally associated with better labor market outcomes, some studies find OLS estimates of the returns to education to be biased due to endogeneity and use the instrumental variable approach to address the issue. However, due to data availability constraints, we could not implement the IV method in the present study.

References

  • Abdulla, K. (2019). Productivity gains from reallocation of talent in Brazil and India. Journal of Macroeconomics, 62, 103160. https://doi.org/10.1016/j.jmacro.2019.103160

    Article  Google Scholar 

  • Abdulla, K. (2021). Corrosive effects of corruption on human capital and aggregate productivity. Kyklos, 74(4), 445–462. https://doi.org/10.1111/kykl.12279

    Article  Google Scholar 

  • Ahn, E. S., Dixon, J., & Chekmareva, L. (2018). Looking at Kazakhstan’s higher education landscape: from transition to transformation between 1920 and 2015. In Palgrave studies in global higher education (pp. 199–227). Springer International Publishing. https://doi.org/10.1007/978-3-319-52980-6_8.

  • Alba-Ramirez, A. (1993). Mismatch in the Spanish labor market: Overeducation? Mismatch in the Spanish labor market. Journal of Human Resources, 28(2), 259–278.

    Article  Google Scholar 

  • Allen, J., & Van Der Velden, R. (2001). Educational mismatches versus skill mismatches: Effects on wages, job satisfaction, and on-the-job search. Oxford Economic Papers, 53(3), 434–452.

    Article  Google Scholar 

  • Battu, H., Belfield, C. R., & Sloane, P. J. (2000). How well can we measure graduate over-education and its effects? National Institute Economic Review, 171, 82–93. https://doi.org/10.1177/002795010017100107

    Article  Google Scholar 

  • Bauer, T. K. (2002). Educational mismatch and wages: A panel analysis. Economics of Education Review, 21(3), 221–229.

    Article  Google Scholar 

  • Becker, G. (1994). Human capital: A theoretical and empirical analysis with special reference to education (3rd edn). National Bureau of Economic Research. https://EconPapers.repec.org/RePEc:nbr:nberbk:beck94-1.

  • Becker, G. S. (1962). Investment in human capital : a theoretical analysis authors: Gary S . Becker source. Journal of Political Economy, 70(5), 9–49. http://www.jstor. (Journal of Political Economy, Part 2 : Investment in Human Beings Published by: The University of Chicago Press Stable).

  • Béduwé, C., & Giret, J. F. (2011). Mismatch of vocational graduates: What penalty on French labour market? Journal of Vocational Behavior, 78(1), 68–79.

    Article  Google Scholar 

  • Boikos, S. (2016). Corruption, public expenditure and human capital accumulation. Review of Economic Analysis, 8, 17–45.

    Article  Google Scholar 

  • Boudarbat, B., & Chernoff, V. (2012). Education-job match among recent Canadian university graduates. Applied Economics Letters, 19(18), 1923–1926.

    Article  Google Scholar 

  • Chevalier, A. (2003). Measuring Over-education. Economica, 70(279), 509–531. https://doi.org/10.1111/1468-0335.t01-1-00296

    Article  Google Scholar 

  • Di Stasio, V. (2017). Who is ahead in the labor queue? Institutions’ and employers’ perspective on overeducation, undereducation, and horizontal mismatches. Sociology of Education, 90(2), 109–126.

    Article  Google Scholar 

  • Dolton, P., & Vignoles, A. (2000). The incidence and effects of overeducation in the U.K. graduate labour market. Economics of Education Review, 19(2), 179–198.

    Article  Google Scholar 

  • Dolton, P. J., & Silles, M. A. (2008). The effects of over-education on earnings in the graduate labour market. Economics of Education Review, 27(2), 125–139.

    Article  Google Scholar 

  • Duncan, G. J., & Hoffman, S. D. (1981). The incidence and wage effects of overeducation. Economics of Education Review, 1(1), 75–86.

    Article  Google Scholar 

  • Frenette, M. (2004). The overqualified Canadian graduate: The role of the academic program in the incidence, persistence, and economic returns to overqualification. Economics of Education Review, 23(1), 29–45.

    Article  Google Scholar 

  • Garcia-Espejo, I., & Ibanez, M. (2006). Educational-skill matches and labour achievements among graduates in Spain. European Sociological Review, 22(2), 141–156. http://www.jstor.org/stable/3559573.

  • Garcia-Mainar, I., & Montuenga, V. (2019). The signalling role of over-education and qualifications mismatch. Journal of Policy Modeling, 41(1), 99–119. https://doi.org/10.1016/j.jpolmod.2019.02.015

    Article  Google Scholar 

  • Ghignoni, E., & Verashchagina, A. (2014). Educational qualifications mismatch in Europe. is it demand or supply driven? Journal of Comparative Economics, 42(3), 670–692. https://doi.org/10.1016/j.jce.2013.06.006

    Article  Google Scholar 

  • Green, F., & Henseke, G. (2016). Should governments of OECD countries worry about graduate underemployment? Oxford Review of Economic Policy, 32(4), 514–537.

    Article  Google Scholar 

  • Green, F., & McIntosh, S. (2007). Is there a genuine under-utilization of skills amongst the over-qualified? Applied Economics, 39(4), 427–439.

    Article  Google Scholar 

  • Groot, W., & Maassen Van Den Brink, H. (2000). Overeducation in the labor market: A meta-analysis. Economics of Education Review, 19(2), 149–158.

    Article  Google Scholar 

  • Gupta, S., Davoodi, H., & Tiongson, E. (2000). Corruption and the provision of health care and education services. IMF Working Paper, International Monetary Fund.

  • Hartog, J. (2000). Over-education and earnings: Where are we, where should we go? Economics of Education Review, 19(2), 131–147.

    Article  Google Scholar 

  • Hartog, J., & Oosterbeek, H. (1988). Education, allocation and earnings in the Netherlands: Overschooling? Economics of Education Review, 7(2), 185–194. https://doi.org/10.1016/0272-7757(88)90043-x

    Article  Google Scholar 

  • Hersch, J. (1991). Education match and job match. The Review of Economics and Statistics, 73(1), 140–144. http://www.jstor.org/stable/2109696.

  • Hsieh, C. .-T., Hurst, E., Jones, C. I., & Klenow, P. J. (2019). The allocation of talent and U.S. economic growth. Econometrica, 87(5), 1439–1474. https://doi.org/10.3982/ecta11427

    Article  Google Scholar 

  • Iriondo, I., & Perez-Amaral, T. (2016). The effect of educational mismatch on wages in Europe. Journal of Policy Modeling, 38(2), 304–323.

    Article  Google Scholar 

  • Kupets, O. (2016). Education-job mismatch in Ukraine: Too many people with tertiary education or too many jobs for low-skilled? Journal of Comparative Economics, 44(1), 125–147.

    Article  Google Scholar 

  • Levels, M., Van Der Veldeny, R., & Alleny, J. (2014). Educational mismatches and skills: New empirical tests of old hypotheses. Oxford Economic Papers, 66(4), 959–982.

    Article  Google Scholar 

  • Mavromaras, K., McGuinness, S., & King, F. (2009). Assessing the incidence and wage effects of overskilling in the australian labour market. The Economic Record, 85(268), 60–72. https://doi.org/10.1111/j.1475-4932.2008.00529.x

    Article  Google Scholar 

  • McGuinness, S. (2006). Overeducation in the labour market. Journal of Economic Surveys, 20(3), 387–418.

    Article  Google Scholar 

  • McGuinness, S., & Bennett, J. (2007). Overeducation in the graduate labour market: A quantile regression approach. Economics of Education Review, 26(5), 521–531.

    Article  Google Scholar 

  • McGuinness, S., Pouliakas, K., & Redmond, P. (2017). How useful is the concept of skills mismatch? No. 10786.

  • McGuinness, S., Pouliakas, K., & Redmond, P. (2018). Skills mismatch: Concepts, measurement and policy approaches. Journal of Economic Surveys, 32(4), 985–1015.

    Article  Google Scholar 

  • McGuinness, S., & Sloane, P. J. (2011). Labour market mismatch among UK graduates: An analysis using REFLEX data. Economics of Education Review, 30(1), 130–145. https://doi.org/10.1016/j.econedurev.2010.07.006

    Article  Google Scholar 

  • Montt, G. (2015). The causes and consequences of field-ofstudy mismatch: An analysis using PIAAC. OECD Social, Employment and Migration Working Papers (167), 1–89. https://doi.org/10.1787/5jrxm4dhv9r2-en.

  • Montt, G. (2017). Field-of-study mismatch and overqualification: labour market correlates and their wage penalty. IZA Journal of Labor Economics, 6(1). https://doi.org/10.1186/s40172-016-0052-x.

  • Murillo, I. P., Rahona-Lopez, M., & Salinas-Jimenez, M. M. (2012). Effects of educational mismatch on private returns to education: An analysis of the Spanish case (1995–2006). Journal of Policy Modeling, 34(5), 646–659. https://doi.org/10.1016/j.jpolmod.2011.07.012.

  • Nordin, M., Persson, I., & Rooth, D. (2010). Education—Occupation mismatch: Is there an income penalty? Economics of Education Review, 29(6), 1047–1059. https://doi.org/10.1016/j.econedurev.2010.05.005

    Article  Google Scholar 

  • OECD. (2017). Higher education in Kazakhstan 2017. OECD. https://doi.org/10.1787/9789264268531-en.

  • Quinn, M. A., & Rubb, S. (2006). Mexico’s labor market: The importance of education-occupation matching on wages and productivity in developing countries. Economics of Education Review, 25(2), 147–156.

    Article  Google Scholar 

  • Robst, J. (2007a). Education, college major, and job match: Gender differences in reasons for mismatch. Education Economics, 15(2), 159–175.

    Article  Google Scholar 

  • Robst, J. (2007b). Education and job match: The relatedness of college major and work. Economics of Education Review, 26(4), 397–407.

    Article  Google Scholar 

  • Roy, A. D. (1951). Some thoughts on the distribution of earnings. Oxford Economic Papers, 3(2), 135–46. http://www.jstor.org/stable/2662082.

  • Sánchez-Sánchez, N., & McGuinness, S. (2013). Decomposing the impacts of overeducation and overskilling on earnings and job satisfaction: an analysis using REFLEX data. Education Economics, 23(4), 419–432. https://doi.org/10.1080/09645292.2013.846297

    Article  Google Scholar 

  • Sattinger, M. (1993). Assignment models of the distribution of earnings. Journal of Economic Literature, 31(2), 831–880.

    Google Scholar 

  • Sellami, S., Verhaest, D., Nonneman, W., & Van Trier, W. (2017). The impact of educational mismatches on wages: The influence of measurement error and unobserved heterogeneity. B.E. Journal of Economic Analysis and Policy, 17(1).

  • Sicherman, N. (1991). Overeducation in the Labor Market. Journal of Labor Economics, 9(2), 101–122.

    Article  Google Scholar 

  • Somers, M. A., Cabus, S. J., Groot, W., & Van Den Brink, H. M. (2019). Horizontal mismatch between employment and field of education: Evidence from a systematic literature review. Journal of Economic Surveys, 33(2), 567–603.

    Article  Google Scholar 

  • Sorensen, A. B., & Kalleberg, A. 01 (1981). An outline of a theory of the matching of persons to jobs. Sociological Perspectives on Labor Markets, 49–74.

  • Thurow, L. C. (1975). Generating inequality. Basic Books. https://www.amazon.com/Generating-Inequality-Paper-Lester-Thurow/dp/0465026680.

  • Verdugo, R. R., & Verdugo, N. T. (1989). The impact of surplus schooling on earnings’: Some additional findings the impact of surplus schooling on earnings. Some Additional Findings, 24(4), 629–643.

    Google Scholar 

  • Verhaest, D., Sellami, S., & Van Der Velden, R. (2017). Differences in horizontal and vertical mismatches across countries and fields of study. International Labour Review, 156(1), 1–23.

    Article  Google Scholar 

  • Verhaest, D., & Van Der Velden, R. (2013). Cross-country differences in graduate overeducation. European Sociological Review, 29(3), 642–653.

    Article  Google Scholar 

  • Witte, J. C., & Kalleberg, A. L. (1995). Matching training and jobs: The fit between vocational education and employment in the German labour market. European Sociological Review, 11(3), 293–317.

    Article  Google Scholar 

  • Wolbers, M. .H. .J. (2003). Job mismatches and their labour-market effects among school-leavers in Europe. European Sociological Review, 19(3), 249–266.

    Article  Google Scholar 

  • World Economic Forum. (2019). The global competitiveness report 2019. World Economic Forum.

  • Yakusheva, O. (2010). Economics of education review return to college education revisited: Is relevance relevant? Economics of Education Review, 29(6), 1125–1142. https://doi.org/10.1016/j.econedurev.2010.06.006

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Nazarbayev University, 53 Kabanbay, Batyr Avenue, Nur-Sultan, Republic of Kazakhstan

    Balzhan Serikbayeva & Kanat Abdulla

Authors
  1. Balzhan Serikbayeva
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Kanat Abdulla
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Kanat Abdulla.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Appendix A: Description of the data

Appendix A: Description of the data

See Fig. 1.

Fig. 1
figure 1

Rates of education-job mismatches across age and education categories

Full size image

See Tables 6, 7, 8, 9, 10, 11 and 12.

Table 6 Descriptive statistics
Full size table
Table 7 Incidence of education-job mismatches among different categories of employees
Full size table
Table 8 Incidence of educational mismatches across industries
Full size table
Table 9 Income effects of mismatch situations for lower and higher income samples
Full size table
Table 10 Industry groups
Full size table
Table 11 Sample size before and after dropping missing observations
Full size table
Table 12 Comparing the characteristics of missing observations across regions
Full size table

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Serikbayeva, B., Abdulla, K. Education-Job Mismatch: Implications for Individual Earnings and Aggregate Output. Soc Indic Res 163, 723–752 (2022). https://doi.org/10.1007/s11205-022-02912-x

Download citation

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11205-022-02912-x

Keywords

Mathematics Subject Classification

Search

Navigation