Vertical and horizontal mismatches and career mobility: evidence from female college graduates

Abstract

Using panel data from the 2010 Graduates Occupational Mobility Survey, this paper estimates the incidence and impact of horizontal and vertical mismatches on labour mobility among Korean female college graduates at the early stages of their careers. Unlike most previous studies, this study proposes three types of educational mismatch status: (1) vertically mismatched only; (2) horizontally mismatched only; and (3) both vertically and horizontally mismatched. The findings show that the share of educationally mismatched workers is non‐negligible in the Korean labour market (approximately 30 per cent). However, the data also points to an improvement in job matching over time. Regardless of the type of educational mismatch, the results provide evidence consistent with many previous studies: educational mismatch is significantly and positively associated with job turnover. In particular, vertically and horizontally mismatched workers are more likely to switch jobs than their vertically or horizontally mismatched counterparts. These findings indicate that educationally mismatched graduates are more likely to change jobs—suggesting that educational mismatch can be viewed as an investment in human capital at the beginning of a career.