Determinants of Qualification Mismatch Between Russian University Graduates and Their Jobs

In Russia, hundreds of thousands of university graduates enter the labour market every year, and roughly one third of them in the very first year take up jobs that formally do not require a university degree. Existing research has traditionally focused either on individual determinants of such mismatch or on regional conditions, but rarely considers them jointly. This study provides a quantitative comparison of the contribution of three sources of variation in qualification mismatch: characteristics of the graduate’s individual educational profile, the quality of the institutional environment of the university, and parameters of the regional labour market. Qualification mismatch is defined as a situation where a graduate with higher education is employed in a position that does not require a university degree. The empirical analysis relies on data from the Graduate Employment Monitoring, the University Performance Monitoring, and regional statistics of the Federal State Statistics Service for 2023 (over 372,000 graduates from 759 universities in 82 regions). The thesis proposes a Qualification Mismatch Index that combines the formal gap between the attained and required qualification levels according to the Russian Classification of Occupations (RCO) and an earnings penalty relative to the median wage of peers without signs of mismatch in the same occupation-region cell. To decompose the variance of the index, a cross classified multilevel model (CCREM) is employed. The results show that university academic selectivity is one of the strongest predictors of lower mismatch: the higher the average Unified State Exam (USE) score of enrolled students, the less frequently graduates end up in positions below their qualification level. At the individual level, graduating with honours and completing a master’s programme reduce the risk of mismatch, whereas fee paying studies and part time (correspondence) modes of study increase it. At the regional level, higher wage levels are associated with lower prevalence of mismatch, while a higher share of workers with higher education, on the contrary, is associated with more mismatch due to stronger competition for a limited number of graduate jobs; regions with higher unemployment display lower mismatch, since a narrower and more competitive group of graduates enters formal employment. The variance decomposition shows that the university educational environment and regional labour market conditions account for comparable shares of between group differences (29% and 27%, respectively); the findings are robust across a range of checks and provide a basis for further causal analysis and the development of applied monitoring tools.