Mitigating wage penalties from education–occupation mismatches through workplace learning among manufacturing workers

Purpose This paper aims to examine the role of workplace learning in mitigating the wage penalties associated with horizontal mismatch – also known as field-of-study mismatch – which occurs when a worker, educated in one field, works in another field. Design/methodology/approach Using data from manufacturing workers in 23 countries from the Program of International Assessment of Adult Competencies (PIAAC), this study applies Mincer’s equation to assess how workplace learning moderates the relationship between horizontal mismatch and earnings, controlling for demographic and job characteristics and country fixed effects. Findings On-the-job training and workshops or seminars significantly alleviate wage penalties for horizontally mismatched workers. The mitigating effect of workplace learning is pronounced among managerial workers. By firm size, on-the-job training is particularly effective in small and medium-sized firms, whereas workshops or seminars are more beneficial in larger firms. Research limitations/implications This study is based on cross-national data, which does not allow for causal inference regarding the effect of horizontal mismatch on wages. Practical implications The findings reveal context-specific workplace learning strategies that enhance productivity for mismatched workers. Complementarity between learning and training and adaptive partnerships with educational institutions and industry are highlighted. Originality/value Despite growing research on wage penalties associated with education–occupation mismatches, few studies focus on practical solutions to mitigate the penalty. This study highlights workplace learning as a strategy to mitigate wage penalties for the mismatched workers.