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Education–Occupation Mismatch and Its Wage Penalties in Informal Employment in Thailand

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  • Tanthaka Vivatsurakit

    (Faculty of Economics, Chulalongkorn University, Thailand)

  • Jessica Vechbanyongratana

    (Faculty of Economics, Chulalongkorn University, Thailand)

Abstract

This study examines the incidence of vertical mismatch among formal and informal workers in Thailand. Using the 2011, 2013, and 2015 Thailand Household Socio-economic Surveys, the study analyzes the relationship between vertical mismatch and wage penalties and premiums across four types of workers: formal government, formal private firm, informal private firm, and informal own-account workers. The incidence of overeducation is modest among the oldest cohort (8.7%) but prevalent among the youngest cohort (29.3%). Government employees face the highest overeducation wage penalties (28.2%) compared to matched workers, while in private firms, informal workers have consistently higher overeducation wage penalties than formal workers. Educated young workers are increasingly absorbed into low-skill informal work in private firms and face large overeducation wage penalties. The inability of many young workers to capitalize on their educational investments in Thailand's formal labor market is a concern for future education and employment policy development in Thailand.

Suggested Citation

  • Tanthaka Vivatsurakit & Jessica Vechbanyongratana, 2021. "Education–Occupation Mismatch and Its Wage Penalties in Informal Employment in Thailand," Asian Development Review, MIT Press, vol. 38(1), pages 119-141, March.
    • Handle: RePEc:tpr:adbadr:v:38:y:2021:i:1:p:119-141
    DOI: 10.1162/adev_a_00160
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    Cited by:

    1. Celia P. Vera & Bruno Jiménez, 2022. "The Short-Term Labor Market Impact of Venezuelan Immigration in Peru," CEDLAS, Working Papers 0304, CEDLAS, Universidad Nacional de La Plata.
    2. Cedrick Kalemasi Mosengo & Christian Zamo Akono, 2024. "Effect of Informal Employment on Overeducation in Developing Countries with a focus on the Democratic Republic of Congo (DRC)," Working Papers 24/004, European Xtramile Centre of African Studies (EXCAS).
    3. Celia P. Vera & Bruno Jiménez, 2022. "Do immigrants take or create natives' jobs? Evidence of Venezuelan immigration in Peru," Working Papers 2022-18, Lima School of Economics.
    4. Cedrick Kalemasi Mosengo & Christian Zamo Akono, 2024. "Effect of Informal Employment on Overeducation in Developing Countries with a focus on the Democratic Republic of Congo (DRC)," Working Papers of the African Governance and Development Institute. 24/004, African Governance and Development Institute..

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