IMPACT OF VERTICAL QUALIFICATION MISMATCH ON ECONOMIC GROWTH

Abstract

The econometric output shows that once the vertically matched graduates are introduced into the model, the elasticity of human capital input to aggregate output becomes positive and statistically significant. At the same time, the influence of the overskilled employees remains negative and statistically significant. This implies that the neoclassical model of growth needs to be further elaborated in order to properly estimate the determinants of economic growth in countries with a higher stock of human capital. Moreover, the study poses some challenges to the educational policy in the field of higher education. It shows that an in-depth analysis is needed of the factors determining the vertical qualification mismatch.