INTERNATIONAL CONFERENCE: "New Skills for
New Jobs in the Western Balkans"
Sarajevo 27-28. OCTOBER 2011
OVER-EDUCATION AND MISMACHES
AT THE LABOUR MARKET
-MONTENEGRO CASE-
BOZIDAR SISEVIC
E-mail: bozidar sisevic@zzzcg.me
Main aims of presentation
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Up to know, in forme socialist counties, now transitional
countries, concept of over-education is still new.
Due to, the main goal of this paper/presentation is to:
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To introduce and theow some lits on the concept in theory of
industrialised countries
To show specific nature of this problem in montenegro
To ilustrate extent and different forms of the over-education and
mismaches in montenegro
To analize couses and conseguences
To rise avarenes of the problem
To propose this issu for further research in the
DEFINITION and NATURE OF OVER-EDUCATION
in Industrialised countries - Short Historical
Overwue
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A. SHORT HISTORICAL OVERVIWS
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1. CONCEPT OF OVEREDUCATION IN economic literature dates
from the begining of 1970s[1] (when M. Spence challenged the
classical human capital theory (by Gary Becker).
2. IN THE MEAN TIME QUITE A LOT OF RESEARCH HAS BEEN
DONE and a different theroies have been developed
3. UP TO RECAINT TIME A HUMAN CAPITAL THEORY (HCT)
DOMINATED (ECONOMIC LITERATURE )
4. RENUVAL OF INTREST FOR THE ISSUE OF OVEREDUCATION.
Recent educational expansion in many countries and the job crises
has renewed interest in over-education. The educational system
has often been highlighted as the main source of over-education,
whereas the role of the labour market has been neglected.
[1] Spencer, Michael (1973). Job Market Signaling. The Quortaly
Journal of Economics 87 (3)
DEFINITION and NATURE OF OVER-EDUCATION
in Industrialised countries - Short Historical
Overwue
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B. Definition:
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There ara meny definitions of overeducation. Most coman reads:
Over-education occurs when investment in
human capital is being excessive for the
job currently carried out by the individual.
4
DEFINITION and NATURE OF OVER-EDUCATION
in Industrialised countries - Short Historical
Overwue

C. PROBLEM OF MEASURING OVER-EDUCATION/MISMACHES
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Measuring OVER-EDUCATIO OR ‘underutilisation of education’ is a rather
difficult task and most of the approaches do not deliver satisfactory results.
TWO TIPS OF DEFFINITIONS AND MEASURING HAVE BEEN APPLIED IN
THER RESEARCH – SUBJECTIVE AND OBJECTIVE
SUBJECTIVE MEASURES rely on what individuals report themselves on the
utilisation of skills. (According to The 2005 European Survey on Working
Conditions 52.3% of workers declare that ‘their duties correspond well to
their present skills’; 13% ‘need further training to cope well with their
duties’; 34.6% estimate that they ‘have the skills to cope with more
demanding duties’)
MORE OBJECTIVE measures usually compare the years of schooling
attained by a worker with the average level of schooling within the worker’s
occupation.
OTHERS look at the educational level of the worker and compare this to the
requirements of a specific job.
DEFINITION and NATURE OF OVER-EDUCATION
in Industrialised countries - Short Historical
Overwue

D. TIPES OF OVER-EDUCATION/MISMACHES:
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FORMAL OVER-EDUCATION (is occuring when real
knowledge and competences of the worker at the certain job
only formaly excedes real job requrements),
REAL OVER-EDUCATION (is occuring when real knowledge
and competences do excede coinside with what is expected
from certain diploma and job requrements),
QUNTITAVE OVER-EDUCATION IMBALACES (occures when
the number of individuls with certain education excedes the
nomber of available jobs at the labour market)
QULITATIVE OVER-EDUCATION (occure when there is a
differences between the skills a worker provides and the skill
necessary for the job).
DEFINITION and NATURE OF OVER-EDUCATION
in Industrialised countries - Short Historical
Overwue

E. (NEGATIVE) CONSEQUENCES OF
THE OVEREDUCATION/MISMACH
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wage differential (overeducated earn less
then thouse who fit completely)
job sutisfaction (overeducated are less
sutisfied with a job)
Transitional Countries – Former socialist
countries of West Balcan
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1.Concept of over-education in these countires is still new and not well undestud
(there was little research if any)
2. Humana capital theroy (HCT) concept prevailed in forme socialis countries,
and, actualy, HCT has never been unchalanged up know,
3. During socialist time, there ware meny instances of over-education similar to
those in industrialized countries but there was little interes of researches and
oficials
4. Recaint rise of interest.With a recaint explosion of higher education and
increas of unemployment of higly educated will influance interest of researches
and policymakers for this issue.
The main aim and of this paper/presentation is to indicate that recant explosion
of high education i.e.. Mass education in a small lees developed traditional and
transitional country like Montenegro can lead to big mismatches at the labour
market, underutilisation of the work force and high unemployment of the most
educated
Actualy, we are tolking obut new phenomena in these countries.
OVER-EDUCATION AND QULITY OF EDUCATION –
SHORT DESCRIPTION OF THE EGZISTING
SITUATION
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Over- education or mass education is a very new phenomena (less the 10 years) and it is
beginning to produce negative consequences
In the last 5-6 years college and university enrolment is very high (around 90% of the
those who completed secondary education enrol at college or university
Quite substantial number of employees enrol at colleges and universities to get diploma of
higher education (job promotion, job security, higher salaries)
a lot of people are in the pipeline due to long studding time (around 6 years) and high
drop autos (around 6o% enrolled does not complete high education)
Quite big increase of the number of unemployed and increase of share in total
unemployment
Productivity and competitiveness of the national economy does not increase regardless of
substantial increase of education of the employed and of the population in general
Contribution of education to the GDP (very low – around 5% in us over 60%) and does not
increase over time although average level of education of the population and employees
increased substantially[1].
Entrepreneurs and other employers are no satisfaction with the quality of the workforce employees (3 studies[2] show quit a big
Un satisfaction (around 50%) with the quality of employees who comes from the
educational system. Both - essential-hard core skills for occupation and soft skills).
Students un sutisfaction with conditions and facilities for studding and with quality of
education has been growing
Pisa results: Montenegro students show pure performance at these tests (around 45 place
at the scale of 55 counties); Montenegro (state) university was low at the scale of bologna
process implementation ranking (in particular on the issue of quality control).
I. DISCREPANCES/MISMACHES IN THE SECONDARY
EDUCATION – HORIZONTAL MISMACHES AT THE III
LEVEL OF VET EDUCATION
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Odnos gimnazija VET
Horizontal mismatch - between demand and supply for certain
sectors and occupations at the iii level of education:
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Thourism (cooks, waters, meat caters, fast food preparation)
Construction and home building (practicaly all ocupations)
Agriculture, especialy private sektor of agriculture (young selfemplyed
farmers )
Certain crafts (personal services – electritations, home appliance
repairs, home electronics devices, carpanters, bricklayers, car
maintiance and repairs)
Production workers in certain industries and certain jobs (metalurgy,
mining, some processing industries)
Notice:

These shortages are not so evident in the official statistics at national
level regarding demand and supply of these occupations. Nominal
supply is much biger then the real supply – real availability of the
people for employment
I. DISCREPANCES/MISMACHES IN THE SECONDARY
EDUCATION – HORIZONTAL MISMACHES AT THE III
LEVEL OF VET EDUCATION
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Main reasons for mismaches:
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Big diskrepance/mismach between supply/ enrolement
And actual demand on the market,
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lack of knowledge, work experiance and competencies and
reluctance of entreprenurs to hiring and employ this people,
Upvords movement/ progression from the iii to the iv level of
education,
Regional diskrepances/mismaches ( most of the supply in the
underdeveloped region and most of the demand in the central and
costal area. Budva, herceg novi, podg.)
Unfer competition - entrepeneurs prefer to hiher »imported«
workforce (better trained, less costly, less dimanding working
conditions...)
Shortages have been overcome by importing workforce from the
region (yearly import of work force has been officialy in the range
of 20 000 to 60 000; real import is qute higher)
DISCREPANCIES AT THE III LEVEL
25000
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Total III level
2481
Total IV level
19946
Total
22427
22427
19946
20000
15000
10000
5000
2481
0
Total III level
Total IV level
Total
DISCREPANCIES AT THE III LEVEL
6000
5185
5019
4991
5000
4152
4000
2942
2837
3000
2542
2542
2046
2011
2000
1672
‚‚‚‚‚‚
1033
987
1000
912
795
685
384
35
0
117117
105
28
861888
384
0 71 71 0
0
269286
191191117
17
50 48 98 27
0 74 74
0
Transport Foresty Mecaniks
Electotechnic Trade, Economisc,Personal Tectile
and wood and metal
tourism low and services and skin
prosessingprocessin
and administration
catering
UKUPNO
IV
III
IV
UKUPNO
III
IV
UKUPNO
III
IV
UKUPNO
III
UKUPNO
IV
III
UKUPNO
IV
III
UKUPNO
IV
III
UKUPNO
IV
III
UKUPNO
IV
III
UKUPNO
IV
III
IV
UKUPNO
III
IV
UKUPNO
III
IV
UKUPNO
III
UKUPNO
IV
III
UKUPNO
IV
III
0
Musics Arhitecture,Chemistry, Geology, Agriculture,Medicine Fine arts
geodesy nonmetals mining
food
and
and
and
and
production
designe
construction printing metallurgy and food
processing
Changes at the labour market in 2000, 2005, 2010
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40%
35%
Uunemployment
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38%
Eemployment
40%
31%
30%
30%
26%
27%
29%
29%
35%
32% 31%
32%
2000
25%
20%
2005
20%
2010
15%
16%
15%
10%
5%
7%
5%
31%
28% 28%
30%
25%
34%
23%
25%
23%
21%
20%
18%
17%
10%
0%
I + II
III + V
IV
VI+ VII1+ VII2+ VIII
2005
2010
5%
0%
2000
I +II
III+V
IV
VI+VII1+VII2+VIII
I. DISCREPANCES/MISMACHES AT THE
HIGHER EDUCATION
CONCLUSION and WAY FOREWARD
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Recant over education us a consequence of mass education has started to produce several
negative consequences:
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limited knowledge and competences,
Low contribution to increase productivity
It contributes to increase in job unsutisfaction
It does not employment (opposite it can be a course of unemployment and it can contribute to high
unemployment)
It leads to high unemployment of the most educated – even to long term unemployment
It contributes to the shortage of the labour force at the lover level of education (in particular at some
occupations at the iii level
If decisive measures are not taken in very recant time, negative consequences will increase
leading to waste of time and money for substantial numbers of individuals, their families
and whole society we can talk hear about typical case of lost generations)
The situation in the education and labour market, i expressed in these slogans:
The issue of over education in the (west Balkan) region deserves and requires much more
attention from all agents:
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first of all researches to document much better its courses and (negative) consequences,
government (state and local policy makers),
entrepreneurs
educators,
parents
students