Differences in horizontal and vertical mismatches across countries and fields of study

We investigate to what extent differences in educational mismatches across countries and fields of study are explained by differences in labour institutions, educational institutions, and labour market imbalances. We rely on early career data for graduates in Europe and Japan and distinguish between full mismatch (FMM: field-of-study mismatch and overeducation combined), mere horizontal mismatch (HMM) and mere vertical mismatch (VMM). Mere HMM is found to be lower in countries with higher employment protection, higher unemployment benefits and more selective educational programs. For mere VMM, particularly differences in imbalances explain cross-country differences. Most country-level variables affecting mere HMM or VMM also affect FMM. In addition, FMM is positively related to collective bargaining coverage. Conclusions regarding field-of-study differences in mismatches are analogous, with both educational program characteristics and imbalances being explanatory factors.status: publishe