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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
    Note: Institutional Papers
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    References listed on IDEAS

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    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.
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