Abstract:

The aim of this study was to investigate the existence of sectorial undereducation and overeducation problems in the Turkish labor market. In order to cope with this issue, the 2009 Household Labor Force Survey (TurkStat), which covers 145,934 individuals within 27 sectors, was utilized. An objective measure of education–occupation mismatch based on the mean level of schooling was used as the main tool in the analysis. The results revealed two important points. Firstly, high levels of undereducation and overeducation problems in the sectoral job groups were found. Secondly, the results showed that these problems are not specific to a few sectors, but they are widespread among many sectoral job groups, which has created serious problems for the Turkish economy. Moreover, we employed Oaxaca decomposition to investigate the effects of overeducation and undereducation on wage outcomes, and the findings indicate that education–occupation mismatches in the Turkish labor market are also reflected on such outcomes. Finally, the Turkish labor market penalizes workers who acquire less education than the adequate level to perform their jobs, whereas it rewards the workers who obtain more education than the adequate level, but not to a considerable extent.

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