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

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  • Balzhan Serikbayeva

    (Nazarbayev University)

  • Kanat Abdulla

    (Nazarbayev University)

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.

Suggested Citation

  • Balzhan Serikbayeva & Kanat Abdulla, 2022. "Education-Job Mismatch: Implications for Individual Earnings and Aggregate Output," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 163(2), pages 723-752, September.
  • Handle: RePEc:spr:soinre:v:163:y:2022:i:2:d:10.1007_s11205-022-02912-x
    DOI: 10.1007/s11205-022-02912-x
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