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In Search of a Better Match: Qualification Mismatches in Developing Asia

Author

Listed:
  • Chua, Kenn

    (Asian Development Bank)

  • Chun, Natalie

    (Asian Development Bank)

Abstract

This paper empirically tests the role of search frictions in driving qualification mismatches in the labor market. Using new data from several low-income economies in urban Asia we find that overeducation in less developed labor markets are more pervasive than in more developed economies. Moreover, frictions related to search costs are a crucial determinant of match quality resulting in socially inefficient talent misallocation. Our findings suggest scope for policy interventions that improve worker-job matches with potential gains to wages and aggregate productivity.

Suggested Citation

  • Chua, Kenn & Chun, Natalie, 2016. "In Search of a Better Match: Qualification Mismatches in Developing Asia," ADB Economics Working Paper Series 476, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0476
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    References listed on IDEAS

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    1. 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.
    2. Mathan Satchi & Jonathan Temple, 2009. "Labor Markets and Productivity in Developing Countries," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 183-204, January.
    3. Sicherman, Nachum, 1991. ""Overeducation" in the Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 9(2), pages 101-122, April.
    4. Mathan Satchi & Jonathan Temple, 2009. "Labor Markets and Productivity in Developing Countries," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 183-204, January.
    5. Robert Shimer, 2005. "The Assignment of Workers to Jobs in an Economy with Coordination Frictions," Journal of Political Economy, University of Chicago Press, vol. 113(5), pages 996-1025, October.
    6. Sattinger, Michael, 1993. "Assignment Models of the Distribution of Earnings," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 831-880, June.
    7. 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.
    8. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
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    Citations

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    Cited by:

    1. Vichet Sam, 2018. "Unemployment duration and educational mismatches: An empirical investigation among graduates in Cambodia," Economics Bulletin, AccessEcon, vol. 38(3), pages 1554-1565.
    2. SAM, Vichet, 2018. "Overeducation among graduates in developing countries: What impact on economic growth?," MPRA Paper 87674, University Library of Munich, Germany.
    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.

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    More about this item

    Keywords

    Asia; labor markets; matching; qualification mismatches; search;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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