There is a consensus that one of the most important ingredients for high and sustainable growth is human capital accumulation. Yet, a dierent strand of literature argues that there are some frictions in the labor markets of most countries that result in possible education-occupation mismatches, and consequently inefficiencies. Despite a significant amount of research using data from advanced economies there are very few studies on developing economies. Considering that human capital is scarce in these countries, whether it is efficiently allocated is arguably relatively more important. This paper using data from two different years examines the incidence of overeducation in Turkey. The ndings show that there is a signicant amount of over- and undereducated workers, and they are paid signicantly less than those with
the same level of education but working in jobs that require education
levels that match their own. The magnitude of the incidence and the
impact of mismatches on wages are, however, not too different than in
most developed economies
