[Vol.28 No.3] Field-of-study Mismatch and the Long-term Wage Effects of Graduating During a Recession

Micro & Institutional Economics Team(82-2-759-5471)

Author: Young Jun Choi(Bank of Korea)

 In recent years, there has been a growing interest in how workers with a university education who were employed for the first time during a recession experienced continuous wage losses. Against this background, this study tries to examine the mechanisms by which wage losses persist among university graduates during a recession. As a result of this analysis, it was found that the continuity of the wage losses suffered by university graduates who take their first job during a recession was due to the field-of-study mismatch, that is, the mismatch between the workers' university major and the skills required at the workplace. Specifically, it was analyzed that about 70% of the wage losses caused by the recession are explained by the field-of-study mismatch.

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