The Effect of Educational-job Mismatch on Company’s Productivity: A Panel Data Approach (Case study from Afghanistan)

The mismatch of education, especially over-education, leads to inefficient allocation scarce resources and becomes a public policy problem. purpose this study is analyze the impact educational-job on firm productivity. For this, we used panel dataset for period 2010-2016 obtained from Central Statistical Organization (CSO) Afghanistan, World Bank database, Ministry Labor social welfare. Methodologically, aggregated at company level using ORU (Overeducation, Required Education. Undereducation) criteria. We also applied OLS model, fixed effects GMM estimator dynamic systems. investigate significantly positive university-level demands productivity while attempting control simultaneity concerns, unobserved work values that do not change over time, peer group consequences, interplay production process adjustment; additional or longer periods over-education over-skilling (for younger as well older workers) are detrimental productivity; years under-education under-skilling young employees) good (bad) enterprises Governments should use greater levels education elderly employees instrument boost Generalized method moments (GMM) approach in work, which adds Afghan literature.