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Horizontal Mismatch in the Labour Market of Graduates: The Role of Signalling

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  • Domadenik, Polona

    (University of Ljubljana)

  • Far?nik, Daša

    (University of Ljubljana)

  • Pastore, Francesco

    (Università della Campania Luigi Vanvitelli)

Abstract

We follow Brodaty et al. (2008) and develop a model within the signalling literature where an employer decides whether to hire a worker or not conditionally on the signals she sends – field and length of study and high education (HE) institution. The empirical design of our paper builds on evidence relative to first labour market entry of graduates to identify a signalling effect of individual and institutional quality of study on individual horizontal match quality. First, based on a matched unique employer-employee dataset we report the extent of horizontal mismatch for graduates of different fields of education for a post-transition economy (Slovenia). Second, we test the signal of HE institutions and above average study duration on the likelihood of a horizontal mismatch separately for each field of education. We find that graduates from specific HE institutions experience significantly higher likelihood to get a job that matches the field of study for social sciences, namely business and administration and to a smaller extent education. On the contrary, HE institutions do not signal skills or abilities in the most technical fields of education (engineering, computing, manufacturing). The above average study duration has mixed effects based on the field of education. It can either signal lower innate ability (i.e. for law graduates) or increased skills due to student work (i.e. computing graduates).

Suggested Citation

  • Domadenik, Polona & Far?nik, Daša & Pastore, Francesco, 2013. "Horizontal Mismatch in the Labour Market of Graduates: The Role of Signalling," IZA Discussion Papers 7527, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp7527
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    Cited by:

    1. Aina, Carmen & Baici, Eliana & Casalone, Giorgia & Pastore, Francesco, 2019. "Delayed Graduation and University Dropout: A Review of Theoretical Approaches," IZA Discussion Papers 12601, Institute of Labor Economics (IZA).
    2. McGuinness, Seamus & Pouliakas, Konstantinos & Redmond, Paul, 2017. "How Useful Is the Concept of Skills Mismatch?," IZA Discussion Papers 10786, Institute of Labor Economics (IZA).
    3. Rudakov, Victor & Figueiredo, Hugo & Teixeira, Pedro N. & Roshchin, Sergey, 2019. "The Impact of Horizontal Job-Education Mismatches on the Earnings of Recent University Graduates in Russia," IZA Discussion Papers 12407, Institute of Labor Economics (IZA).
    4. 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.
    5. Seamus McGuinness & Konstantinos Pouliakas & Paul Redmond, 2018. "Skills Mismatch: Concepts, Measurement And Policy Approaches," Journal of Economic Surveys, Wiley Blackwell, vol. 32(4), pages 985-1015, September.
    6. Vichet Sam, 2018. "Education-job mismatches and their impacts on job satisfaction: An analysis among university graduates in Cambodia," Working Papers hal-01839463, HAL.
    7. SAM, Vichet, 2018. "Education-job mismatches and their impacts on job satisfaction: An analysis among university graduates in Cambodia," MPRA Paper 87928, University Library of Munich, Germany, revised 15 Jul 2018.
    8. Ahmet Alper Ege & Erkan Erdil, 2023. "Determinants of overlapping mismatch in the Turkish labour market," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 57(1), pages 1-9, December.

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    More about this item

    Keywords

    horizontal mismatch; signalling; Slovenia;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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