Education, skills mismatch, and wage differentials

Chowdhury, Sahana Roy; Bros, Catherine; Gooptu, Sayoree

doi:10.4324/9781003158349-11

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“…1 At the same time, according to International Labour Organization (ILO, 2020), around 258 million workers were overeducated across 114 countries (from all regions and income levels across the world) in the sense that their education level exceeds their job requirement. 2 In developing countries like India, Roy Chowdhury, Bros, and Gooptu (2021) estimate that 66% of workers in the Indian manufacturing sector are overeducated. Kukreja (2018) reports the education mismatch rate in the Indian textile and clothing industry is 67.61%, which is much above the world average.…”

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confidence: 99%

School dropout and overeducation in developing economies: Feasibility of a budgetary solution^†

Gooptu

Mukherjee

2022

Review Development Economics

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High rates of school dropout and overeducation are typical problems faced by developing economies. This paper addresses these issues in a unique theoretical model that accounts for complementarity between household and infrastructural investment in education production function on the one hand, and school and higher education on the other hand. The results derived in this paper show that a reallocation of the education budget in favor of school education can solve both problems at the same time if certain conditions are satisfied. Otherwise, reallocation aggravates the problems. This paper questions the efficacy of the widely practiced budget reallocation policy in favor of school education, and in turn, shows that reallocation cannot eliminate school dropouts.

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Section: Introductionmentioning

confidence: 99%

School dropout and overeducation in developing economies: Feasibility of a budgetary solution^†

Gooptu

Mukherjee

2022

Review Development Economics

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Estimating Skill Mismatch in the Indian Labour Market: A Regional Dimension

Gooptu

Bros

Chowdhury

2023

Global Business Review

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The article provides an overview of the very pertinent skill mismatch issue in the Indian labour market. It specifically looks into the state-wise overeducation rates, a type of vertical skill mismatch where the education level of the worker exceeds the job requirements. The article tries to provide a regional dimension to the estimates of overeducation and addresses the problem by linking it to the incidence of vocational training among employees. Given that vocational training plays an important role in imparting industry-relevant skills, the article recommends its expansion as a necessary factor for curbing overeducation in states lagging in the industrial sector. Using the recent Periodic Labour Force Survey (PLFS) data, the article unveils trends in recent years where, though the propensity to take vocational training has increased, it is not sufficient to meet the industry’s demands. Also, the stunted proportion of individuals with government-sponsored vocational training signals either inferior quality or low access. The later fact is reinstated when we look at the bias towards higher income households in undertaking such training. Apart from the need to address the supply side of skilled labour, by making training programmes more inclusive, there is also a need to address the demand side to ensure proper alignment between the skills derived from training programmes and those required by the industry. Besides, given the huge informal labour market, there is an urgent need for proper certification and recognition of skills derived from training programmes to ensure their productive employment. The article shows a severe imbalance between the demand and supply sides and calls for active participation of different stakeholders, including the private sector, to address the problem. In this regard, the article shows instances of successful implementation of vocational training facilities in other countries, which can form a basis for rolling out well-defined and coherent programmes.

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Education, skills mismatch, and wage differentials

Cited by 2 publications

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School dropout and overeducation in developing economies: Feasibility of a budgetary solution^†

School dropout and overeducation in developing economies: Feasibility of a budgetary solution^†

Estimating Skill Mismatch in the Indian Labour Market: A Regional Dimension

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Education, skills mismatch, and wage differentials

Cited by 2 publications

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School dropout and overeducation in developing economies: Feasibility of a budgetary solution†

School dropout and overeducation in developing economies: Feasibility of a budgetary solution†

Estimating Skill Mismatch in the Indian Labour Market: A Regional Dimension

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Resources

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School dropout and overeducation in developing economies: Feasibility of a budgetary solution^†

School dropout and overeducation in developing economies: Feasibility of a budgetary solution^†