Education-job mismatch in Ukraine: Too many people with tertiary education or too many jobs for low-skilled?

Abstract

This paper examines changes in the incidence of education-job mismatch in Ukraine over 10 years and the determinants of overeducation and undereducation at the regional level, with a particular attention paid to the differences between younger and older workers. It also analyzes shifts in the occupational and sectoral structure of employment driven by technological changes and restructuring of the Ukrainian economy. A job polarization in Ukraine seems to stem from deindustrialization, expansion of subsistence farming, rapid growth of retail trade and other less-knowledge intensive services, rather than from routine-based technological changes observed in developed countries. Our results, obtained from the Hausman–Taylor panel data model, suggest that fairly high and persistent education-job mismatch results from both the supply (too many people with tertiary university education) and demand (too many jobs for low-skilled workers) factors. Taking into account that older workers are often more prone to overeducation in Ukraine than their younger peers, the major concern is that overeducation is likely to be a dead-end for many workers.