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Job Mismatches in Pakistan: Is there Some Wage Penalty to Graduates?

Author

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  • Shujaat Farooq

    (Pakistan Institute of Development Economics (PIDE), Islamabad.)

Abstract

In this study, an attempt has been made to estimate the incidence of job mismatch and its impacts on graduate‘s earnings in Pakistan. The study has divided the job mismatch into three categories; qualification-job mismatch, skill mismatch and field of study and job mismatch. The primary dataset has been used in which the formal sector employed graduates have been studied. This study has measured the qualification-job mismatch by three approaches and found that about one-third of the graduates are facing qualification-job mismatch. Similarly, more than one-fourth of the graduates are mismatched in skill, about half of them are overskilled and the half are under-skilled. The analysis also shows that 11.3 percent of the graduates have irrelevant and 13.8 percent have slightly relevant jobs to their studied field of disciplines. Our analysis shows that over-qualified graduates face wage penalty under different approaches. After controlling skill heterogeneity, there is less penalty to apparently overqualified and more penalty to genuinely over-qualified. The over-skilled graduates face wage penalties and the under-skilled get wage premiums as compared to the matched workers. A good field of study and job matches also improve the wages of graduates.

Suggested Citation

  • Shujaat Farooq, 2015. "Job Mismatches in Pakistan: Is there Some Wage Penalty to Graduates?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 54(2), pages 147-164.
  • Handle: RePEc:pid:journl:v:54:y:2015:i:2:p:147-164
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    File URL: http://www.pide.org.pk/pdf/PDR/2015/Volume2/147-164.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Education and Inequality; Higher Education; Human Capital; Labour Market; Wages;

    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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