Is There Some Wage Penalty to Qualification Mismatch? A Cross-Sectional Analysis for 2001-14 Period
Author: Muhammad Kashif

In the early 1970s, the upsurge of new graduates in United States stimulated research on the concept of qualification job mismatch nexus. The present study has analyzed the phenomenon of qualification job mismatch, its determinants and impacts on earnings for the period of 2001-14. The research has used the micro data of various rounds of Labour Force Survey (LFS) for the period of 2001-14. As qualification job mismatch is linked with educated employed workers, therefore the analysis is carried out only for employed workers, having education matric and above. The present study found that around one-fourth of the employed educated workers are facing the issue of qualification-job mismatch, either in the form of under-qualification or over-qualification. The issue has been persisting over the time while analyzing from 2001 to 2014 period. Further, the present study has analyzed the phenomenon in different dimensions by including individual characteristics (age, sex, and marital status etc.) and labour market attributes to thoroughly understand the dynamics of qualification-job mismatch. The impact of qualification-job mismatch on wages show that under-qualified workers are getting wage premium (on average 18%) while over-qualified workers are facing wage penalties (on average 23%). This study concludes that job mismatch causes inefficient use of available resources and ultimately cause welfare loss to the society. The present study suggests that affective policies should be made which can solve the issue of qualification-job mismatch. Supervisor:- Dr. Shujaat Farooq

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Supervisor: Shujaat Farooq

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