Skill Mismatch and Returns to Education in Manufacturing: A Case of India’s Textile and Clothing Industry
Kukreja, Prateek | September 2018
Abstract
Today, as India treads the path of becoming a knowledge economy, we face a paradox of intensifying skill shortages coupled with unemployment or underemployment among highly educated workers. While a shortage of skills (or under-education) is definitely a cause of concern, surplus education (or over-education) can also lead to underutilization of skills and further lower demand for low skill workers. Given this scenario, the paper attempts to measure the incidence and extent of skill/education mismatch and analyse the economic returns/cost to over/under education in one of India’s largest labour intensive industries: Textiles and Clothing (T&C). The study is based on the 68th round of NSS Employment and Unemployment Survey estimates. Using the over-education/required education/undereducation (ORU) models on a cross section dataset of individuals employed (as a regular salaried/ wage employee or as casual wage labour) in India’s T&C industry, we find that the overall educational mismatch ratio during 2011-12 was to the tune of 67.61%. Further, results indicate that while returns to surplus education is positive, it is less in magnitude as compared to returns to required education, suggesting underutilization of excess education. There’s also a significant wage penalty associated with each deficit year of education.
Citation
Kukreja, Prateek. 2018. Skill Mismatch and Returns to Education in Manufacturing: A Case of India’s Textile and Clothing Industry. © Indian Council for Research on International Economic Relations. http://hdl.handle.net/11540/8693.Keywords
Quality Education
Technical Education
Primary Education
Educational Systems
Educational Reforms
Industry
Electronics Industry
Commerce and Industry
Development cooperation
Training programs
Vocational training
Training methods
Economic growth
Training courses
Technological institutes
Labor market
Educational aspects
Compulsory education
Economics of education
Educational policy
Industrial Projects
Industrial Products
Industrial Policy
Manufacturing Industries
Industrial Sector
Educational tests and measurements
Comprehensive high schools
College preparation programs
Transnational education
Communication in higher education
Fundamental education
Capitalism and education
Right to education
Educational change
Educational evaluation
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