The impact of education-occupation mismatches on wages in Mexico

ABSTRACT

Higher levels of educational have been shown to increases an individual’s earnings, but these impacts may be less apparent when an education-occupation match fails to occur. Previous studies show education-occupation mismatches to impact earnings, productivity and migration. We analyze the impact of education-occupation matching on earnings in Mexico from 2012 to 2017. The returns from an additional year of schooling are higher when one secures employment in an occupation that requires the additional education. We also extend our analysis to women whom earn less than their male counterparts, however observe higher returns from additional schooling.

KEYWORDS:

• Education occupation matching
• wages
• women
• Mexico

JEL CLASSIFICATION:

• J24
• J31
• O12
• O15
• O54

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Mehta et al. (2011) use Mexican Census data, but end in the year 2000.

² Authors’ calculations from the Mexican National Survey of Occupation and Employment (ENOE) and the Mexican National Survey of Employment (ENE) .

³ INEGI updated the occupational codes in 2012.

⁴ For the OLS measure we use the standard deviation for the distribution of years of schooling by occupation, conditional on age and survey year.

⁵ We remove wages that are above the 99.9 percentile of the non-zero wage sample.