IMPACT OF VERTICAL QUALIFICATION MISMATCH ON ECONOMIC GROWTH
IMPACT OF VERTICAL QUALIFICATION MISMATCH ON ECONOMIC GROWTH

Author(s): Mariya Neycheva
Subject(s): Economy, Supranational / Global Economy, Business Economy / Management, Public Finances
Published by: Бургаски свободен университет
Keywords: economic growth
Summary/Abstract: Recent increase of educational attainment of the population in the developed world entails both positive and negative effects on the economic development of today’s economies. One of the most serious consequences is the growing skill mismatch among tertiary education graduates. Generally speaking, the vertical qualification mismatch is defined as employment below the theoretical skill level acquired. With regard to higher education, it comprises university graduates with any occupation different from Managers, Professionals, Technicians and Associate professionals since according to the International Standard Classification of Occupations (ISCO-08) they require an academic degree. As the competition among graduates at the labor market tightens, the most qualified ones are expected to be hired at job positions corresponding most closely to the educational degree acquired. Therefore, it is reasonable to accept that the rate of qualification mismatch is an indicator of the quality of nation’s human capital. Table 1 presents data on the labor force with tertiary education (ISCED 5-8) in the 11th new EU member states from Central and Eastern Europe. The percentage has been continuously increasing, thus reaching on average 30% in 2016 compared to only 18% in 2000. In five countries – Czech Republic, Poland, Romania, Slovenia and Slovakia – the cumulative rise is around or above 100%. It is clearly visible that the rate of job mismatch was growing up parallel to the broadening share of graduates in the active population. At least a double-digit increase is observed in all countries except Estonia and Lithuania. This tendency is more clearly expressed in countries with a lower starting level of the most educated human resources such as Poland, Slovakia, Czech Republic, and Romania.

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