Education-Occupation Mismatch among Vocational Secondary and University Graduates in Egypt

There is a vast literature on conceptually formulating education-occupation mismatch and on measuring over- and under-education as compared to the job skills required. Fewer studies are focused on identifying the correlates and consequences of such a mismatch, particularly in the developing world. Accordingly, the main objective of this paper is to contribute to the limited literature on education-occupation mismatch in Egypt and compare the extent of the mismatch using two different approaches: (1) the self-reported and (2) the statistical/realized match approaches. Using data from the Egypt Labor Market Panel Survey 2023, this paper sheds light on the nature of the education-occupation mismatch phenomena in the Egyptian labor market. The paper compares the characteristics of the overeducated, undereducated, and well-matched workers, wage penalties for over- or under-education, and their sense of job satisfaction. Analyses are focused on vocational secondary and university education graduates as these are the two terminal educational tracks in Egypt. The results show that undereducation is not prevalent in the Egyptian labor market, while overeducation is very common among both vocational secondary and university graduates. Job satisfaction was least prevalent among the overeducated. As compared to the well-matched group, overeducation was generally associated with a wage penalty, but undereducation was associated with a wage premium among vocational secondary graduates and with a wage penalty among university graduates. Mismatch was also associated with skills acquisition and job-skill requirements. The results of the skills analysis confirm the previous literature highlighting the importance of acquiring skills over credentials to effectively address the existing education-occupation mismatch in the Egyptian labor market..