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Skill Mismatch and Returns to Education in Manufacturing: A Case of India’s Textile and Clothing Industry

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  • Prateek Kukreja

Abstract

The paper attempts to measure the incidence and extent of skill/education mismatch and analyse the economic returns/cost to over/under education in one of India’s largest labour intensive industries: Textiles and Clothing (T&C). The study is based on the 68th round of NSS Employment and Unemployment Survey estimates. Using the over-education/required education/undereducation (ORU) models on a cross section dataset of individuals employed (as a regular salaried/ wage employee or as casual wage labour) in India’s T&C industry, it finds that the overall educational mismatch ratio during 2011-12 was to the tune of 67.61%. Further, results indicate that while returns to surplus education is positive, it is less in magnitude as compared to returns to required education, suggesting underutilization of excess education. There’s also a significant wage penalty associated with each deficit year of education.

Suggested Citation

  • Prateek Kukreja, 2019. "Skill Mismatch and Returns to Education in Manufacturing: A Case of India’s Textile and Clothing Industry," Working Papers id:13003, eSocialSciences.
  • Handle: RePEc:ess:wpaper:id:13003
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    References listed on IDEAS

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    8. Chiswick, Barry R. & Miller, Paul W., 2010. "Does the choice of reference levels of education matter in the ORU earnings equation?," Economics of Education Review, Elsevier, vol. 29(6), pages 1076-1085, December.
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    17. repec:iza:izawol:journl:y:2014:p:88 is not listed on IDEAS
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