From Classrooms to Wrong Jobs: How Turkey’s Degrees Miss the Employment Mark
A World Bank study finds that over half of Turkey’s wage-employed workers face vertical skills mismatch, with overeducated individuals suffering significant wage penalties. Using refined measures, the research reveals that mismatch disproportionately affects women, migrants, and low-wage earners, exacerbating inequality.

In a comprehensive study led by Saumik Paul of the University of Manchester and Dhushyanth Raju of the World Bank, the World Bank’s June 2025 discussion paper “Vertical Skills Mismatch in Turkey’s Labor Market” uncovers critical misalignments between the educational attainment of workers and the demands of the jobs they occupy. Using data from the Turkish Household Labour Force Surveys (HLFS) between 2009 and 2022, the researchers explore how widespread overeducation and undereducation have become in Turkey’s wage-employed workforce. The study goes beyond conventional mismatch measures by introducing a refined methodology that accounts for age, sector, and temporal shifts, offering a more accurate picture of the structural disconnect between education systems and employment practices.
Too Many Degrees, Too Few Aligned Jobs
Turkey’s educational system has expanded rapidly over the last two decades, fueled by state-driven policies such as the “One University per Province” initiative and a dramatic increase in university quotas. This has led to a significant rise in tertiary-educated individuals entering the labor market. However, the job market has failed to keep pace. Employers, particularly in smaller or informal firms, often continue to rely on outdated job structures and recruitment practices. As a result, a large share of the labor force finds themselves in jobs that either underutilize or overstate their formal educational credentials. According to the refined measure developed in this study, over 56 percent of wage-employed workers in Turkey are mismatched in terms of their education and job requirements.
The paper criticizes traditional methods for detecting mismatch, which simply compare a worker’s education with the occupational average, for failing to account for systemic changes in education levels over time. Younger workers with university degrees, for instance, may appear overqualified for roles still occupied by older workers with lower levels of education, not because the job no longer requires advanced skills, but because of generational shifts in qualifications. By adjusting for occupation, age, sector, and year, the study’s refined metric corrects this bias and offers a more reliable understanding of mismatch trends.
Winners and Losers in the Mismatch Economy
The refined analysis shows that overeducation is most prevalent in formal jobs and medium to large-sized firms, where hiring processes tend to prioritize educational qualifications as a screening device. In contrast, undereducation is more commonly found in micro firms and informal jobs, where flexibility and informal skills often substitute for formal credentials. These trends highlight how firm size and structure directly influence mismatch rates, as well as wage outcomes.
Wage penalties and rewards associated with a mismatch are far from uniform. Workers who are overeducated earn, on average, 10.4 percent less than their matched peers, indicating substantial underutilization of their human capital. On the flip side, undereducated workers earn 6.8 percent more than similarly matched individuals, likely benefiting from learning-by-doing or from outperforming their credentialed peers on the job. Importantly, these earnings disparities are far more pronounced under the refined measure than under the traditional one, which tended to dilute such findings due to demographic and structural oversights.
Deepening Inequalities for Women and Migrants
One of the most sobering revelations of the study is the degree to which vertical skills mismatch compounds existing inequalities in the labor market. Women, foreign-born workers, and low-wage earners experience the harshest wage penalties associated with overeducation. Women, in particular, face not only higher rates of overeducation in certain sectors but also earn significantly less than men when overeducated. Foreign-born workers are more likely to be overqualified for their jobs, yet their educational backgrounds may be undervalued due to issues such as language barriers or credential recognition.
Recent job entrants, classified as “transited” workers, also display higher rates of mismatch, though their wage penalties are less severe, suggesting that some of this misalignment may be temporary. Over time, as these workers gain experience and navigate the labor market, their job fit tends to improve. Nonetheless, the persistence of mismatch for other groups indicates structural inefficiencies that are not easily corrected by individual adaptation alone.
Mismatch and Inequality: A Hidden Link
The most far-reaching implication of the study may be its findings on the distributional impact of mismatch. Simulated wage comparisons between mismatched and hypothetically matched workers reveal that overeducation and vertical mismatch generate the largest earnings shortfalls for individuals in the lower and middle tiers of the wage distribution. Specifically, workers in the third to fifth deciles suffer the most pronounced losses, while undereducated workers in these same segments often enjoy modest wage advantages. These findings suggest that vertical skills mismatch not only depresses productivity but also exacerbates income inequality by disproportionately penalizing those who are already economically vulnerable.
Notably, Turkey’s 2012 regional investment incentives, which offered tax breaks and other subsidies to firms in less-developed regions, had no discernible impact on reducing mismatch or improving wage outcomes. This underscores the importance of aligning employment policies not just with job creation, but with educational quality and skill utilization.
Ultimately, the study offers a compelling case for rethinking how labor markets and education systems interact. It recommends that educational expansion be matched by job upgrading, that firms be incentivized to recognize and reward actual productivity over credentials, and that targeted interventions be designed for groups most affected by mismatch. Without such comprehensive reforms, Turkey risks squandering the benefits of its investments in education and entrenching structural inequalities in its workforce. The paper’s nuanced analysis sets a new benchmark for how countries should approach the complex, layered challenge of ensuring that educational progress leads to meaningful, well-matched employment.
- READ MORE ON:
- World Bank
- Turkish Household Labour Force Surveys
- Turkey
- HLFS
- FIRST PUBLISHED IN:
- Devdiscourse
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