Education-Job mismatch, earnings and worker’s satisfaction in African labor market: evidence from Cameroon

Abstract

Job mismatch such as underemployment is a major characteristic of African labor markets. However, in some countries, the effect of skills’ (under)utilization on earning and job satisfaction is at this point not clear. This study aims to analyze the education-job mismatch effects on earnings and job satisfaction in Cameroon, by using data on wage employment provided by the National Institute of Statistics. To achieve it, the augmented Mincer’s model inspired by Verdugo & Verdugo’s approach is estimated by using the ordinary least squares with robust standard errors and the quantile regression technique. The estimator employs a control function approach to simultaneously account for endogeneity and double selection biases. Furthermore, the Probit with double sample selection is estimated to gauge the educational mismatch effect on job satisfaction. Results show that overeducation is associated with wage deprivation while undereducation generates a wage premium. These effects both differ for formal and informal workers and vary along the wage distribution. Compared to well-matched workers, overeducated and underemployed workers are less satisfied whereas undereducated workers are more satisfied with their job. However, the pattern of variation in terms of job satisfaction differs for formal and informal workers.