IDEAS home Printed from https://ideas.repec.org/p/ess/wpaper/id13003.html
   My bibliography  Save this paper

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

Author

Listed:
  • 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
    Note: Institutional Papers
    as

    Download full text from publisher

    File URL: http://www.esocialsciences.org/Download/repecDownload.aspx?fname=A20192414371_29.pdf&fcategory=Articles&AId=13003&fref=repec
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hartog, Joop, 2000. "Over-education and earnings: where are we, where should we go?," Economics of Education Review, Elsevier, vol. 19(2), pages 131-147, April.
    2. Ren, Weiwei & Miller, Paul W., 2012. "Changes over time in the return to education in urban China: Conventional and ORU estimates," China Economic Review, Elsevier, vol. 23(1), pages 154-169.
    3. Duncan, Greg J. & Hoffman, Saul D., 1981. "The incidence and wage effects of overeducation," Economics of Education Review, Elsevier, vol. 1(1), pages 75-86, February.
    4. Budría, Santiago & Moro-Egido, Ana I., 2008. "Education, educational mismatch, and wage inequality: Evidence for Spain," Economics of Education Review, Elsevier, vol. 27(3), pages 332-341, June.
    5. Kiker, B. F. & Santos, Maria C. & de Oliveira, M. Mendes, 1997. "Overeducation and undereducation: Evidence for Portugal," Economics of Education Review, Elsevier, vol. 16(2), pages 111-125, April.
    6. Richard R. Verdugo & Naomi Turner Verdugo, 1989. "The Impact of Surplus Schooling on Earnings: Some Additional Findings," Journal of Human Resources, University of Wisconsin Press, vol. 24(4), pages 629-643.
    7. Tsai, Yuping, 2010. "Returns to overeducation: A longitudinal analysis of the U.S. labor market," Economics of Education Review, Elsevier, vol. 29(4), pages 606-617, August.
    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.
    9. Leuven, Edwin & Oosterbeek, Hessel, 2011. "Overeducation and Mismatch in the Labor Market," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 4, chapter 0, pages 283-326, Elsevier.
    10. Agnieszka Chlon-Dominczak & Andrzej Zurawski, 2017. "Measuring skills mismatches revisited – introducing sectoral approach," IBS Working Papers 03/2017, Instytut Badan Strukturalnych.
    11. Peter J. Sloane & Kostas Mavromaras, 2020. "Overeducation, skill mismatches, and labor market outcomes for college graduates," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-88, May.
    12. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 12, pages 1043-1171, Elsevier.
    13. Cohn, Elchanan & Khan, Shahina P., 1995. "The wage effects of overschooling revisited," Labour Economics, Elsevier, vol. 2(1), pages 67-76, March.
    14. Glenda Quintini, 2011. "Right for the Job: Over-Qualified or Under-Skilled?," OECD Social, Employment and Migration Working Papers 120, OECD Publishing.
    15. Giorgio Di Pietro & Peter Urwin, 2006. "Education and skills mismatch in the Italian graduate labour market," Applied Economics, Taylor & Francis Journals, vol. 38(1), pages 79-93.
    16. Hersch, Joni, 1991. "Education Match and Job Match," The Review of Economics and Statistics, MIT Press, vol. 73(1), pages 140-144, February.
    17. repec:iza:izawol:journl:y:2014:p:88 is not listed on IDEAS
    18. Russell W. Rumberger, 1987. "The Impact of Surplus Schooling on Productivity and Earnings," Journal of Human Resources, University of Wisconsin Press, vol. 22(1), pages 24-50.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Prateek Kukreja, 2018. "Skill Mismatch and Returns to Education in Manufacturing: A Case of India's Textile and Clothing Industry," Indian Council for Research on International Economic Relations (ICRIER) Working Paper 364, Indian Council for Research on International Economic Relations (ICRIER), New Delhi, India.
    2. 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.
    3. Ma del Mar Salinas-Jim鮥z & Marta Rahona-L󰥺 & In鳠P. Murillo-Huertas, 2013. "Gender wage differentials and educational mismatch: an application to the Spanish case," Applied Economics, Taylor & Francis Journals, vol. 45(30), pages 4226-4235, October.
    4. Orbay, Benan & Aydede, Yigit, 2015. "Educational mismatch and the cost of underutilization in Turkish labour markets," MPRA Paper 65713, University Library of Munich, Germany.
    5. Abbi Kedir & Andri Kyrizi & Francisco Martinez-Mora, 2012. "Signalling and Productivity Effects of Overeducation: Is It Really a Waste of Resources?," Discussion Papers in Economics 12/19, Division of Economics, School of Business, University of Leicester.
    6. Iñaki Iriondo & Teodosio Pérez-Amaral, 2013. "The Effect of Educational Mismatch on Wages Using European Panel Data," Working Papers 700, Queen Mary University of London, School of Economics and Finance.
    7. Wen, Le & Maani, Sholeh A., 2023. "Earnings Penalty of Educational Mismatch: A Comparison of Alternative Methods of Assessing Over-Education," IZA Discussion Papers 15943, Institute of Labor Economics (IZA).
    8. Berlingieri, Francesco & Erdsiek, Daniel, 2012. "How relevant is job mismatch for German graduates?," ZEW Discussion Papers 12-075, ZEW - Leibniz Centre for European Economic Research.
    9. Iñaki Iriondo & Teodosio Pérez-Amaral, 2013. "The Effect of Educational Mismatch on Wages Using European Panel Data," Working Papers 700, Queen Mary University of London, School of Economics and Finance.
    10. Brian Clark & Clément Joubert & Arnaud Maurel, 2017. "The career prospects of overeducated Americans," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-29, December.
    11. Sholeh A. Maani & Le Wen, 2021. "Over-education and immigrant earnings: a penalized quantile panel regression analysis," Applied Economics, Taylor & Francis Journals, vol. 53(24), pages 2771-2790, May.
    12. Matloob Piracha & Florin Vadean, 2013. "Migrant educational mismatch and the labor market," Chapters, in: Amelie F. Constant & Klaus F. Zimmermann (ed.), International Handbook on the Economics of Migration, chapter 9, pages 176-192, Edward Elgar Publishing.
    13. Sattinger, Michael & Hartog, Joop, 2013. "Nash bargaining and the wage consequences of educational mismatches," Labour Economics, Elsevier, vol. 23(C), pages 50-56.
    14. Boll, Christina & Leppin, Julian Sebastian, 2013. "Unterwertige Beschäftigung von Akademikerinnen und Akademikern: Umfang, Ursachen, Einkommenseffekte und Beitrag zur geschlechtsspezifischen Lohnlücke," HWWI Policy Papers 75, Hamburg Institute of International Economics (HWWI).
    15. Christina Boll & Julian Sebastian Leppin, 2016. "Differential Overeducation in East and West Germany: Extending Frank's Theory on Economic Returns Changes the Picture of Disadvantaged Women," LABOUR, CEIS, vol. 30(4), pages 455-504, December.
    16. Baktash, Mehrzad B., 2023. "Overeducation, Performance Pay and Wages: Evidence from Germany," GLO Discussion Paper Series 1327, Global Labor Organization (GLO).
    17. Angela Dalmonte & Tommaso Frattini & Sofia Giorgini, 2024. "The Overeducation of Immigrants in Europe," Development Working Papers 496, Centro Studi Luca d'Agliano, University of Milano.
    18. Marta Palczyńska, 2021. "Overeducation and wages: the role of cognitive skills and personality traits," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 21(1), pages 85-111.
    19. Alma Espino, 2011. "Evaluación de los desajustes entre oferta y demanda laboral por calificaciones en el mercado laboral de Uruguay," Revista de Economía del Rosario, Universidad del Rosario, November.
    20. Luz A. Flórez & Leidy Gómez D., 2019. "Skill mismatch and labour turnover in a developing country: the Colombian case," Borradores de Economia 1099, Banco de la Republica de Colombia.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ess:wpaper:id:13003. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Padma Prakash (email available below). General contact details of provider: http://www.esocialsciences.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.