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The purpose of this paper is twofold: first, it analyses the relationship between educational level, the school-to-work transition period for youth and positions which suffer from an education-job mismatch in Kyrgyzstan; and second, it investigates the effect of the education-job mismatch on the wages of youth in Kyrgyzstan.

The study uses the International Labor Organization 2013 data from the school-to-work transition survey for Kyrgyzstan. The Kaplan–Meier failure analysis is employed to demonstrate the relationship between school-to-work transition and mismatch status. To investigate the effect of an education-job mismatch on wages, a Mincer-type equation with OLS estimations is used. Along with this, taking into consideration potential unobserved heterogeneity issue, a propensity score matching method is applied.

The results indicate a large difference between those with tertiary education and those with non-tertiary education in terms of the probability of being employed with a wrong match. Young individuals without tertiary education are more likely to be employed with a right match. Analysis of the impact of overeducation on wages shows that the impact of overeducation depends on how it is measured. According to the objective approach, overeducated male individuals receive low wages compared to well matched, but estimation results based on the total sample of subjective approach indicate the positive effects of overeducation on wage.

This paper contributes to the existing literature on the school-to-work transition and overeducation by focusing on one of the transition economies, which has been largely neglected by the literature.