Job-field underemployment in the Israeli labour market: effect on income differentials

This article examines the effect of the inefficient allocation of academic individuals in the Israeli labour market in terms of mismatch between their fields of education and occupation – a phenomenon known as horizontal mismatch – on individual wage levels. The average annual income among horizontally mismatched academics was found to be significantly lower than the average annual income among horizontally matched academics. Therefore, one can see how significant the horizontal mismatch phenomenon is with respect to its effect on individuals' expected income throughout their career.