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This paper empirically tests the role of search frictions in driving qualification mismatches in the labor market. Using new data from several low-income economies in urban Asia we find that overeducation in less developed labor markets are more pervasive than in more developed economies. Moreover, frictions related to search costs are a crucial determinant of match quality resulting in socially inefficient talent misallocation. Our findings suggest scope for policy interventions that improve worker-job matches with potential gains to wages and aggregate productivity.


Suggested Citation
Chua, K., & Chun, N. (2016). In search of a better match: Qualification mismatches in developing Asia (ADB Economics Working Paper Series No. 476). Manila: Asian Development Bank.

Required Publisher's Statement
© Asian Development Back. Available at ADB’s Open Access Repository under a Creative Commons Attribution license (CC BY 3.0 IGO).