Education and skill mismatch in Korean youth labor market

Abstract

This paper aims to explain the paradoxical phenomena of high unemployment and early turnover of young Korean workers by examining job mismatch in youth labor market. Using the Korea Youth Panel Survey (KYPS) from 2011 to 2015, this paper conducts panel data analysis and studies the effect of job mismatch among Korean youth graduates, assuming that job match affects worker’s labor market outcomes and utilities. The results suggest that education and skill mismatch have significantly adverse effects on monthly wages, working hours, and job satisfaction: incidence of either types of mismatch is associated with wage penalties, longer working hours, and dissatisfaction. These results are line with findings from the previous literature that job mismatch is negatively associated with worker’s labor market outcomes. In addition, in most estimations, the results of education and skill mismatch tend to be coincided in terms of direction and magnitude.