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Does job mismatch affect wage earnings among business and management graduates in Vietnam?

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  • Tran, Tuyen Quang
  • Bich Thi Vu, Ngoc
  • Van Vu, Huong

Abstract

This paper investigates the wage penalty resulting from horizontal job mismatch among wage earners with university degrees in the fields of business and management. The study utilizes pooled cross-sectional data from the Labour Force Surveys (LFS) in 2018, 2019 and 2020 in Vietnam. We employ instrumental variable (IV) estimators to address the potential endogeneity of job mismatch. Estimates from the ordinary least square (OLS) and IV methods show that job mismatch has a negative effect on wage earnings and that the penalty for such mismatches is nearly double for men than for women. Also, for mismatched graduates in the private sector, the wage penalty is nearly triple what it is for those in the public sector. Notably, we find that the wage penalty is substantial for those under 50, but less so for those over 50. This suggests that education-specific skills can be substituted by work experience to some extent.

Suggested Citation

  • Tran, Tuyen Quang & Bich Thi Vu, Ngoc & Van Vu, Huong, 2023. "Does job mismatch affect wage earnings among business and management graduates in Vietnam?," Research in International Business and Finance, Elsevier, vol. 65(C).
    • Handle: RePEc:eee:riibaf:v:65:y:2023:i:c:s0275531923001083
    DOI: 10.1016/j.ribaf.2023.101982
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    More about this item

    Keywords

    Business and management graduates; Education-job mismatch; Local average treatment effect; Wage penalty; Labour market; Vietnam;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education

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