The effect of education-job mismatch on net income: evidence from a developing country

The research team, consisting of Ljiljan Veselinović, Jasmina Mangafić, and Lejla Turulja, employed an OLS linear regression method to analyze data from the Measure BiH Youth Survey. The study aimed to explore the relationship between education-job mismatch and net income, with a focus on the impact of this mismatch on workers' earnings. The findings of the study indicate that education-job mismatch has a significant effect on net income. Specifically, workers can expect net income differences of 13% to 15% if their level of education does not match that required for their job. However, the study also reveals that the impact of education-job mismatch depends on the level of schooling and age of respondents. For instance, the study finds that the effect of education-job mismatch varies across different levels of schooling, with higher levels of schooling associated with greater income differences. The study's results also highlight the importance of considering the choice of estimation method for incidences of overeducation and undereducation. The researchers emphasize the need to understand interactions between different variables and introduce new variables to examine their influence on earnings. These variables include religiousness, the importance of belonging to a family, and the importance of belonging to a particular city. The study's findings have significant implications for policymakers and educators in Bosnia-Herzegovina. The results suggest that addressing education-job mismatch can have a positive impact on workers' net income, particularly among younger workers. The study's emphasis on the importance of understanding interactions and introducing new variables to examine their influence on earnings highlights the need for a more nuanced approach to understanding the complex relationships between education, job mismatch, and net income. The study's use of a log-transformation of the dependent variable created a left-side semilog functional form, which is typically used in models of the earnings of individuals. This approach allowed the researchers to examine the relationship between education-job mismatch and net income in a more accurate and reliable manner. The study's findings provide valuable insights into the impact of education-job mismatch on net income in a developing country and highlight the need for further research in this area.