Recognizing the need to analyze the education-skills gap in the developing economy context, this paper estimates the extent of education-employment mismatches and the resulting wage consequences in the Philippine labor market. It finds that 39 percent of employed individuals are overeducated while over a quarter are undereducated. Meanwhile, overeducated individuals earn only 5 percent more for a surplus year of schooling, relative to required years of schooling, which have returns of 7 percent to 19 percent. It underlines the importance of labor market policies for improved job-skills matching, for instance, through the reduction of information asymmetries. Public subsidies for higher education must also be premised on improved wage prospects or higher productivity for employed individuals.
This publication has been cited 14 times
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