The income penalty of vertical and horizontal education-job mismatches in the Korean Youth Labor Market: A quantile regression approach

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In this paper we estimate the income effects of over-education and horizontal education-job mismatch jointly by quantile regressions using a data set of Korean college graduates. We find that over-education and horizontal mismatch are positively correlated. Thus, the income loss by over-education (horizontal mismatch) is overestimated if it is estimated ignoring horizontal mismatch (over-education). This overestimation problem is particularly prevalent for workers at low and near-median deciles of the conditional income distribution. We also find that the income penalty on over-education is prevalent for most all quantiles, whereas the income penalty on horizontal mismatch is significant for lower quantiles.

Original languageEnglish (US)
Pages (from-to)67-90
Number of pages24
JournalHitotsubashi Journal of Economics
Issue number1
Publication statusPublished - Jun 1 2016


  • Income penalty
  • Quantile regression
  • Vertical and horizontal mismatches

ASJC Scopus subject areas

  • Economics and Econometrics
  • Business, Management and Accounting(all)

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