The effect of mismatch on labor income in Indonesia

Problems that often arise in the mismatch phenomenon and the impact of mismatches received by workers tend to emphasize the wage gap or the difference in income between individuals who meet the qualifications and individuals who do not meet the qualifications. In 2018, the workforce experienced undereducation of 4.6% and overeducation of 27.9%. Meanwhile, field of study mismatch occurs in 68.4% of the workforce in Indonesia. This research aims to analyze the vertical mismatch phenomenon that occurs in Indonesia and the influence of mismatch in the workforce on differences in workforce income. This research was conducted in Indonesia because it used SAKERNAS Micro data. The independent variables in this research are education level, age, gender, working hours, work location and employment status. The dependent variables in this research are income and productivity as intervening variables. The method used in collecting this data is non-participant observation. The analysis technique used in this research is SMART PLS. The results of the analysis show that education level has a significant effect on labor income in Indonesia. Age has a significant effect on labor income in Indonesia. Gender has a significant effect on labor income in Indonesia. Working hours have a significant effect on labor income in Indonesia. Location of work has a significant effect on labor income in Indonesia. Education level, age, gender, working hours and working location together have a significant effect on labor income in Indonesia in 2021. Productivity has a significant effect on labor income in Indonesia. Productivity mediates the influence of the variables Educational Level, age, gender, working hours and location of work on labor income in Indonesia in 2021.