The Growing Pains of Education: Exploring Educational Mismatch Trends

ABSTRACT Since the 1990s, the Czech Republic has witnessed a significant increase in educational attainment, leading to a rise in educational mismatch. This study investigates the prevalence of vertical and horizontal educational mismatch using data from surveys conducted in 2011 and 2022 on Czech prime working-age employees. It provides insights into the evolving dynamics of educational mismatch, identifies the groups of employees most vulnerable to it, and offers suggestions to mitigate this phenomenon, improve labour market outcomes, and optimize the returns to educational investment. The analysis reveals a growing trend of overeducation over the past decade, particularly among women. In addition, substantial differences were found across fields of study. Fields such as the arts and humanities show high levels of both types of educational mismatch, while education and healthcare demonstrate better alignment. The findings – indicating that approximately half of the employee population experiences some form of educational mismatch – underscore persistent inefficiencies in the allocation of educational resources and highlight the private and societal costs associated with overeducation. Overeducated labour represents a strategic reserve of human capital that could facilitate the shift towards a digital and knowledge-driven economy – yet unlocking this potential will require targeted efforts to align qualifications with future labour market needs.