Abstract: The subject of the paper is education mismatch analysis in the labour market of Serbia. The aim of the paper is to examine the extent of overschooling and underschooling effects on earnings in Serbia. The paper seeks to determine the impact of overschooling and underschooling on wages in Serbia and to what extent do the effects differ depending on occupation. The paper follows the methodology developed by Verdugo and Verdugo (1989), so the extended Mincerian equation was assessed using LFS data in 2019. The basic model results showed that on average in Serbia overeducated workers earn about 5% more, and undereducated workers earn about 1.5% less, regardless of the occupation. The second model specification indicated that after inclusion of the worker’s occupation on average the overeducation effects decrease by 1 pp, while undereducation effects increase by 0.5 pp. The final specification included the interaction between over/undereducation and occupation, and the results indicate that both overeducated and undereducated high-skilled workers earn less than properly educated high-skilled workers in Serbian labour market Keywords: education mismatch, over/underschooling effects, Serbian labour market info:eu-repo/semantics/conferenceProceedings Human capital and welfare Vuksanović, Nemanja Aleksić, Dragan application/pdf 531335 bytes The assessment of wage penalty for over-and under- education in the case of Serbia All rights reserved 2022 https://phaidrabg.bg.ac.rs/o:30025 eng