The effect of education-job mismatch on net income: evidence from a developing country

Abstract

This paper explores the impact of education-job mismatch on the net income of workers in the context of Bosnia-Herzegovina. We used an OLS linear regression method on data from the Measure BiH Youth Survey. A log-transformation of the dependent variable created the left-side semilog functional form, which is typically used in models of the earnings of individuals. Our findings strongly support the statement that education-job mismatch has a significant effect on net income. Workers can expect net income differences between 13% and 15% if their level of education does not match that required for their job. However, our results show that the impact of education-job mismatch depends on the level of schooling and age of respondents. Results regarding education-job mismatch vary across studies, but our study is the first to examine the effect of education-job mismatch on net income in the context of Bosnia-Herzegovina. Second, the effect of education-job mismatch might depend on the choice of estimation method for incidences of overeducation and undereducation. Third, we emphasise the importance of understanding interactions, and fourth, we introduce new variables to understand how they influence earnings. These include religiousness, and the importance of belonging to a family, or a particular city.

Knowledge mapping of skills mismatch phenomenon: a scientometric analysis

“…However, there is a need to understand how skills mismatch can be understood and addressed to advance economic growth in low-income countries. For example, there is a pluralistic understanding of mismatch skills and wages (Veselinović et al , 2020), and input from a scientometric study can provide a comprehensive and nuanced understanding of the literature trends in this field. In terms of policy and practice, higher education institutions, agencies and other organizations can address barriers to employability through legislation and implementation.…”

“…The concept of overeducation occurs when an individual has attained a degree that supersedes the current job requirements. Conversely, undereducation occurs when an individual gets a job position with a lower educational degree than the minimum qualification (Veselinovi c et al, 2020). Researchers from different academic fields and institutions have defined skills mismatches differently.…”

A Critical Review of the Literature on the Concept of Job Mismatch and Overeducation

“…The job-education mismatch is an important topic among researchers because of its various consequences on the labour market (Veselinović et al, 2020). Job-education mismatch happens when the job performed does not match individual skills or education (Li & Wang, 2020).…”

“…The discussion on the horizontal mismatch occurred in literature (Robst, 2007;Boudarbat & Chernoff, 2012;Domadenik et al, 2013). An individual is said to be in a horizontal mismatch or type of study imbalance when there is a difference between the field of study from the learning institution and the scope of employment but at the same time has an equal level of education attained and education required by the employment (Wolbers, 2003;Robst, 2007;Caroleo & Pastore, 2012;Veselinović et al, 2020). The literature that discusses the field of study and overeducation separately is sparse (see Wolbers, 2003;Nordin et al, 2010;Domadenik et al, 2013).…”

Residents’ income distribution effect of business tax replaced with VAT reform—based on CGE model

“…They found that the VAT reform exacerbated the degree of income inequality in the pilot areas. Some scholars examined the factors influencing residents' income inequality from the perspective of basic public services (Liu & He, 2019), minimum wage regulation (Zhan et al, 2020), education and innovation (Akram et al, 2020;Gil-Alana et al, 2020;Veselinovi c et al, 2020), and entrepreneurship (Lecuna, 2020).…”