Title

Micro-econometric analysis of private return and job mismatch of the labor market: a case study of Pakistan

Abstract/Description

The purpose of this study is to highlight the impact of over and under-education (mismatch) in the labor market of Pakistan. In this regard, it is crucial to understand the rate of returns that an individual will receive from investment in education which often leads to over-education or under-education problems prevailing in the labor market. For this purpose, the study will examine and evaluate if a mismatch in the job market exists or not. For analyzing the above-stated objective, data is taken from the Labor Force Survey (LFS) and Pakistan Social and Living Standards Measurement (PSLM) for the time-period 2003-04 to 2014-15, the study has performed the analysis on the disaggregated level. Pseudo Panel approach is employed for estimating the job market mismatch and IRR in context of Pakistan. Findings of this study indicate that the level of overeducation is positively related to the internal rate of return. This shows that when investment in education (on an individual basis) increases, overeducation problem also rises. In context of the prevailing situation, the study suggests, that the government should increase educational expenditure to provide quality education to everyone equally. Secondly, it is necessary to reduce the wage differential from the labor market that is ultimately creating a mismatch problem. Also, the government should evaluate the sectorial demand for labor and connect it with all educational institutions. To make sure that only that number of people will graduate who will be absorbed quickly in any particular field.

Session Theme

Labour Market and Career Choices - Session IIA

Session Type

Parallel Technical Session

Session Chair

Dr. Qazi Masood, Professor, IBA, Karachi

Session Discussant

Dr. Abbas Gillani, Assistant Professor - Institute of Business Administration Karachi

Start Date

4-4-2021 2:29 PM

End Date

3-4-2021 4:00 PM

Comments

Rabia Kanwal is M.Phil. Scholar, Applied Economics Research Centre, University of Karachi Ambreen Fatima is Associate Professor, Applied Economics Research Centre, University of Karachi Faisal Sultan Qadri is Assistant Professor. Applied Economics Research Centre, University of Karachi

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Apr 4th, 2:29 PM Apr 3rd, 4:00 PM

Micro-econometric analysis of private return and job mismatch of the labor market: a case study of Pakistan

The purpose of this study is to highlight the impact of over and under-education (mismatch) in the labor market of Pakistan. In this regard, it is crucial to understand the rate of returns that an individual will receive from investment in education which often leads to over-education or under-education problems prevailing in the labor market. For this purpose, the study will examine and evaluate if a mismatch in the job market exists or not. For analyzing the above-stated objective, data is taken from the Labor Force Survey (LFS) and Pakistan Social and Living Standards Measurement (PSLM) for the time-period 2003-04 to 2014-15, the study has performed the analysis on the disaggregated level. Pseudo Panel approach is employed for estimating the job market mismatch and IRR in context of Pakistan. Findings of this study indicate that the level of overeducation is positively related to the internal rate of return. This shows that when investment in education (on an individual basis) increases, overeducation problem also rises. In context of the prevailing situation, the study suggests, that the government should increase educational expenditure to provide quality education to everyone equally. Secondly, it is necessary to reduce the wage differential from the labor market that is ultimately creating a mismatch problem. Also, the government should evaluate the sectorial demand for labor and connect it with all educational institutions. To make sure that only that number of people will graduate who will be absorbed quickly in any particular field.