TY - JOUR
T1 - Education–occupation mismatch and its wage penalties
T2 - Evidence from Indonesia
AU - Wicaksono, Padang
AU - Theresia, Imelda
AU - Al Aufa, Badra
N1 - Funding Information:
The work was supported by the Universitas Indonesia. We would like to thank the Indonesian Statistics Agency for providing the data of this study and the Vocational Education Program of University of Indonesia for funding this study.
Funding Information:
We would like to thank the Indonesian Statistics Agency for providing the data of this study and the Vocational Education Program of University of Indonesia for funding this study.
Publisher Copyright:
© 2023 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.
PY - 2023
Y1 - 2023
N2 - Overeducation poses a significant challenge in the job market, impacting both job mobility and wage. This study aimed to examine the influence of overeducation experience on two key factors, including 1) the probability of experiencing overeducation again in the current job and 2) the level of wage obtained from the current job. We use data from four surveys of National Labor Force Survey (SAKERNAS): February 2017, 20 August 17, February 2018, and August 2018. We employed the Multinomial Logistic Regression and a Fixed Effect Model analysis. The results showed that workers who had previously experienced overeducation in their past jobs faced a 31.64% probability of re-experiencing it. This probability was lower than the likelihood of transitioning to a matched job, which stood at 67.35%, hence, overeducation served as a transitional phase toward obtaining a suitable job. Additionally, this study found a wage disparity of 16.2% between workers with overeducation experience and those with matched experience when transitioning to a matched job. Interestingly, no wage difference was observed between the two groups when transitioning to overeducation jobs. In conclusion, training programs should be performed to enhance the productivity of new workers to enable them to adapt more quickly to the work environment and avoid wage penalties.
AB - Overeducation poses a significant challenge in the job market, impacting both job mobility and wage. This study aimed to examine the influence of overeducation experience on two key factors, including 1) the probability of experiencing overeducation again in the current job and 2) the level of wage obtained from the current job. We use data from four surveys of National Labor Force Survey (SAKERNAS): February 2017, 20 August 17, February 2018, and August 2018. We employed the Multinomial Logistic Regression and a Fixed Effect Model analysis. The results showed that workers who had previously experienced overeducation in their past jobs faced a 31.64% probability of re-experiencing it. This probability was lower than the likelihood of transitioning to a matched job, which stood at 67.35%, hence, overeducation served as a transitional phase toward obtaining a suitable job. Additionally, this study found a wage disparity of 16.2% between workers with overeducation experience and those with matched experience when transitioning to a matched job. Interestingly, no wage difference was observed between the two groups when transitioning to overeducation jobs. In conclusion, training programs should be performed to enhance the productivity of new workers to enable them to adapt more quickly to the work environment and avoid wage penalties.
KW - developing countries
KW - human capital accumulation
KW - job market
KW - job mobility
KW - labor market
KW - overeducation
KW - vertical mismatch
KW - wage penalty
UR - http://www.scopus.com/inward/record.url?scp=85169322190&partnerID=8YFLogxK
U2 - 10.1080/23311975.2023.2251206
DO - 10.1080/23311975.2023.2251206
M3 - Article
AN - SCOPUS:85169322190
SN - 2331-1975
VL - 10
JO - Cogent Business and Management
JF - Cogent Business and Management
IS - 3
M1 - 2251206
ER -