Abstract
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 we find that overeducation in less
developed labor markets are more pervasive than in more developed economies. Moreover, frictions related to
search costs are a crucial determinant of match quality resulting in socially inefficient talent misallocation. Our
findings suggest scope for policy interventions that improve worker-job matches with potential gains to wages
and aggregate productivity.