ADB economics working paper No. 476 This paper examines the extent to which various factors explains talent misallocation in the form of qualification mismatches across six urban developing Asian economies using the World Bank’s Skills towards Employability and Productivity (STEP) Skills Measurement Survey.

This paper empirically tests the role of search frictions in driving qualification mismatches in the labor market. Using new data from several low-income economies in urban Asia, it is found that overeducation in less developed labor markets are more pervasive than in more developed economies.