IDEAS home Printed from https://ideas.repec.org/a/bla/asiaec/v30y2016i3p295-316.html
   My bibliography  Save this article

Do Skill Mismatches Create a Wage Penalty? Alternative Estimates for Korea

Author

Listed:
  • Hong-kyun Kim
  • Seung-jun Park

Abstract

type="main"> In this paper, we estimate the wage penalty of skill mismatches among young Korean workers using propensity score matching (PSM) and ordinary least squares (OLS) methods. OLS estimates suggest that a moderate wage penalty results from skill mismatches: 3.8 percent for men and 5.6 percent for women. In contrast, PSM estimates suggest a weakly significant wage penalty for men and women only when kernel matching (KM) is used, but not when nearest neighbor matching(NNM) or radius matching (RM) techniques are used. These results contradict the findings of previous studies and suggest that there may not be a substantial wage penalty associated with skill mismatches.

Suggested Citation

  • Hong-kyun Kim & Seung-jun Park, 2016. "Do Skill Mismatches Create a Wage Penalty? Alternative Estimates for Korea," Asian Economic Journal, East Asian Economic Association, vol. 30(3), pages 295-316, September.
    • Handle: RePEc:bla:asiaec:v:30:y:2016:i:3:p:295-316
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/asej.12093
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. McGuinness, Seamus & Sloane, Peter J., 2011. "Labour market mismatch among UK graduates: An analysis using REFLEX data," Economics of Education Review, Elsevier, vol. 30(1), pages 130-145, February.
    2. Cohn, Elchanan & Ng, Ying Chu, 2000. "Incidence and wage effects of overschooling and underschooling in Hong Kong," Economics of Education Review, Elsevier, vol. 19(2), pages 159-168, April.
    3. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    4. Wickens, Michael R, 1972. "A Note on the Use of Proxy Variables," Econometrica, Econometric Society, vol. 40(4), pages 759-761, July.
    5. Robst, John, 2007. "Education and job match: The relatedness of college major and work," Economics of Education Review, Elsevier, vol. 26(4), pages 397-407, August.
    6. Hartog, Joop, 2000. "Over-education and earnings: where are we, where should we go?," Economics of Education Review, Elsevier, vol. 19(2), pages 131-147, April.
    7. Duncan, Greg J. & Hoffman, Saul D., 1981. "The incidence and wage effects of overeducation," Economics of Education Review, Elsevier, vol. 1(1), pages 75-86, February.
    8. Kelly, Elish & O'Connell, Philip J. & Smyth, Emer, 2010. "The economic returns to field of study and competencies among higher education graduates in Ireland," Economics of Education Review, Elsevier, vol. 29(4), pages 650-657, August.
    9. Nordin, Martin & Persson, Inga & Rooth, Dan-Olof, 2010. "Education-occupation mismatch: Is there an income penalty?," Economics of Education Review, Elsevier, vol. 29(6), pages 1047-1059, December.
    10. McCallum, B T, 1972. "Relative Asymptotic Bias from Errors of Omission and Measurement," Econometrica, Econometric Society, vol. 40(4), pages 757-758, July.
    11. Seamus McGuinness, 2007. "How biased are the estimated wage impacts of overeducation? A propensity score matching approach," Applied Economics Letters, Taylor & Francis Journals, vol. 15(2), pages 145-149.
    12. Sicherman, Nachum & Galor, Oded, 1990. "A Theory of Career Mobility," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 169-192, February.
    13. Bauer, Thomas K., 2002. "Educational mismatch and wages: a panel analysis," Economics of Education Review, Elsevier, vol. 21(3), pages 221-229, June.
    14. H. Battu & C. R. Belfield & P. J. Sloane, 1999. "Overeducation Among Graduates: a cohort view," Education Economics, Taylor & Francis Journals, vol. 7(1), pages 21-38.
    15. Hung-Lin Tao & Chia-Yu Hung, 2014. "Vertical and Horizontal Educational Mismatches of Female Graduates in Taiwan," Asian Economic Journal, East Asian Economic Association, vol. 28(2), pages 181-199, June.
    16. Hartog, Joop, 1980. "Earnings and Capability Requirements," The Review of Economics and Statistics, MIT Press, vol. 62(2), pages 230-240, May.
    17. Chun-Hung A. Lin & Chun-Hsuan Wang, 2005. "The Incidence And Wage Effects Of Overeducation: The Case Of Taiwan," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 30(1), pages 31-47, June.
    18. Hersch, Joni, 1991. "Education Match and Job Match," The Review of Economics and Statistics, MIT Press, vol. 73(1), pages 140-144, February.
    19. Sicherman, Nachum, 1991. ""Overeducation" in the Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 9(2), pages 101-122, April.
    20. Hung, Chia-Yu, 2008. "Overeducation and undereducation in Taiwan," Journal of Asian Economics, Elsevier, vol. 19(2), pages 125-137, April.
    21. Russell W. Rumberger, 1987. "The Impact of Surplus Schooling on Productivity and Earnings," Journal of Human Resources, University of Wisconsin Press, vol. 22(1), pages 24-50.
    22. Groot, Wim & Maassen van den Brink, Henriette, 2000. "Overeducation in the labor market: a meta-analysis," Economics of Education Review, Elsevier, vol. 19(2), pages 149-158, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zainizam Zakariya & Kristinn Hermanssons & Kho Yin Yin & Noor Fazlin Mohamed Noor, 2019. "Regional Economic Growth in Malaysia: Does Aggregate Overqualification Matter?," Research in World Economy, Research in World Economy, Sciedu Press, vol. 10(5), pages 139-156, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kihong Park, 2018. "Vertical and horizontal mismatches and career mobility: evidence from female college graduates," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 32(2), pages 109-125, November.
    2. Manuel Salas-Velasco, 2021. "Mapping the (mis)match of university degrees in the graduate labor market," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 55(1), pages 1-23, December.
    3. L. Cattani & G. Guidetti & G. Pedrini, 2014. "Assessing the incidence and wage effects of overeducation among Italian graduates using a new measure for educational requirements," Working Papers wp939, Dipartimento Scienze Economiche, Universita' di Bologna.
    4. Baktash, Mehrzad B., 2023. "Overeducation, Performance Pay and Wages: Evidence from Germany," GLO Discussion Paper Series 1327, Global Labor Organization (GLO).
    5. Fanti, Lucrezia & Guarascio, Dario & Tubiana, Matteo, 2019. "Skill Gap, Mismatch, and the Dynamics of Italian Companies’ Productivity," MPRA Paper 95694, University Library of Munich, Germany.
    6. Balzhan Serikbayeva & Kanat Abdulla, 2022. "Education-Job Mismatch: Implications for Individual Earnings and Aggregate Output," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 163(2), pages 723-752, September.
    7. 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.
    8. Eleni Kalfa & Matloob Piracha, 2017. "Immigrants’ educational mismatch and the penalty of over-education," Education Economics, Taylor & Francis Journals, vol. 25(5), pages 462-481, September.
    9. Kampelmann, Stephan & Rycx, François, 2012. "The impact of educational mismatch on firm productivity: Evidence from linked panel data," Economics of Education Review, Elsevier, vol. 31(6), pages 918-931.
    10. Mariana Olga De Santis & María Cecilia Gáname & Pedro Esteban Moncarz, 2022. "The Impact of Overeducation on Wages of Recent Economic Sciences Graduates," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 163(1), pages 409-445, August.
    11. Brian Clark & Clément Joubert & Arnaud Maurel, 2017. "The career prospects of overeducated Americans," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-29, December.
    12. Lamo, Ana & Messina, Julián, 2010. "Formal education, mismatch and wages after transition: Assessing the impact of unobserved heterogeneity using matching estimators," Economics of Education Review, Elsevier, vol. 29(6), pages 1086-1099, December.
    13. Hong-Kyun Kim & Seung C. Ahn & Jihye Kim, 2012. "Vertical and Horizontal Education-Job Mismatches in the Korean Youth Labor Market : A Quantile Regression Approach," Working Papers 1201, Nam Duck-Woo Economic Research Institute, Sogang University (Former Research Institute for Market Economy).
    14. Kiersztyn, Anna, 2013. "Stuck in a mismatch? The persistence of overeducation during twenty years of the post-communist transition in Poland," Economics of Education Review, Elsevier, vol. 32(C), pages 78-91.
    15. Kim, Hong-Kyun & Ahn, Seung C. & Kim, Jihye, 2016. "The Income Penalty Of Vertical And Horizontal Education-Job Mismatches In The Korean Youth Labor Market: A Quantile Regression Approach," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 57(1), pages 67-90, June.
    16. Morsy, Hanan & Mukasa, Adamon, 2019. "Youth Jobs, Skill and Educational Mismatches in Africa," MPRA Paper 100394, University Library of Munich, Germany.
    17. Hung, Chia-Yu, 2008. "Overeducation and undereducation in Taiwan," Journal of Asian Economics, Elsevier, vol. 19(2), pages 125-137, April.
    18. Hanan Morsy & Adamon N. Mukasa, 2019. "Working Paper 326 - Youth Jobs, Skill and Educational Mismatches in Africa," Working Paper Series 2452, African Development Bank.
    19. Iñaki Iriondo & Teodosio Pérez-Amaral, 2013. "The Effect of Educational Mismatch on Wages Using European Panel Data," Working Papers 700, Queen Mary University of London, School of Economics and Finance.
    20. Iñaki Iriondo & Teodosio Pérez-Amaral, 2013. "The Effect of Educational Mismatch on Wages Using European Panel Data," Working Papers 700, Queen Mary University of London, School of Economics and Finance.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:asiaec:v:30:y:2016:i:3:p:295-316. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/eaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.