Vocational Schooling and Occupational Matching : Gender Differences in Indonesia

As skill mismatch has become the problem in the labor market in Indonesia, this paper examines the effect of the matching between vocational major and occupation in the labor market. Facing the excess supply of working age population, Indonesian government has imposed the vocational policy. Previous empirical evidences showed that the relevance returns of skill and occupation increases earnings in the labor market. The paper uses SAKERNAS 2013 data. A special focus will be on the role of gender. A basic Mincer model is applied to estimate the impact. The results show that the vocational graduates who have major and occupational matching enjoy 13.5% higher wages than those with mismatched. Meanwhile, this effect is not statistically different for males and females. Furthermore, the effect reaches the highest point at the early career in the labor market for male workers, but in the middle of their working age for female workers. This may be due to the differences of the job mobility rate between men and women. Although the matching procedure may produce insignificant result, this research showed the prior studies on the major and occupational matching in vocational education. Nevertheless, this research provides novel evidence for the government to monitor the vocational education policies as it still generates gender inequality in providing training and job availability.