Abstract

This thesis reviews the literature on the education-occupation mismatch. The thesis focuses on Egyptian university graduates and postgraduates in 2018. It studies the determinants of the education-occupation mismatch, and its effect on earnings and workers’ job satisfaction using the 2018 wave of the Egyptian Labor Market Survey (ELMPS). Ordinary least squares (OLS) and probit models were used to investigate the determinants of the education-occupation mismatch, and an OLS and a two-stage least square (2SLS) regressions were estimated with the use of the father’s education and father’s employment status as instrumental variables to determine the effect of the mismatch on labors’ earnings which has shown to be a strong Instrumental variable. The results showed that educational mismatch in the Egyptian labor market is high, overeducated individuals comprise 20.1% of university and above graduates, well-matched individuals comprise 81.1%, while undereducated individuals are minimal constituting only 0.7%. The mismatch is more prevalent among males with 23.4% for overeducation and 0.9% for undereducation compared to 12.9% for overeducated females and 0.3% for undereducated females, while females are more adequately matched constituting 86.4% than their male peers constituting 76.3%. Based on our regression models for the determinants of the mismatch, we found that gender, working experience, region of residency, job characteristics such as the sector of employment including the formality of the job, the economic activity of the job, as well as, the firm size all are significant determinants of the overeducation phenomena. While the significance of marital status changes with the different measurements.

While based on our wage models, the results suggest that overeducated individuals are provided with a wage premium; however, with a smaller magnitude than that of their well-matched counterparts. Gender with females having a wage penalty compared to their male peers, working experience, region of residency, and the sector of employment including the formality of the job are shown to be statistically significant. Finally, the job satisfaction model shows that overeducation decreases the probability of job satisfaction, and it shows that sex, region, employment sector including the formality of the job, and economic activities are all significant factors.

School

School of Business

Department

Economics Department

Degree Name

MA in Economics

Graduation Date

Spring 6-21-2022

Submission Date

6-8-2022

First Advisor

Dr. Rania Roushdy

Committee Member 1

Dr. Rana Hendy

Committee Member 2

Dr. Mina Ayed

Extent

54 p.

Document Type

Master's Thesis

Institutional Review Board (IRB) Approval

Approval has been obtained for this item

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