Education Mismatch in Georgia: 27% of Workers Are Overeducated for Their Jobs — While Employers Report Skill Shortages

GILS Research Team

Editor: Prof. Giorgi Pkhakadze, MD, MPH, PhD

Georgian Institute of Labour Studies · GILS Analysis

17 August 2026

A June 2026 IMF analysis of Georgian Labour Force Survey microdata finds that 27% of prime-age workers and 36% of young workers were overeducated for their jobs in 2024, and that about 40% of tertiary-educated workers held mid- or low-skill jobs. At the same time, employers report shortages of technical and specialist skills. This analysis examines that paradox — too much education of the wrong kind, too few jobs that use it — and what it means for policy.

1. Introduction

Georgia has a highly educated workforce by regional standards, yet unemployment remains high and firms report skill shortages. Earlier work by the World Bank and the European Training Foundation identified Georgia as a high-mismatch economy (World Bank, 2013; Kupets, 2016). The IMF’s 2026 Selected Issues paper updates this evidence using Labour Force Survey microdata for 2019–2024 (IMF, 2026). This analysis summarises the findings and discusses their implications for education and labour market policy.

2. Methodology

The IMF measures vertical mismatch in two ways. The modal (empirical) method compares each worker’s education with the most common education level in their occupation; a worker is overeducated if their education exceeds the mode by more than one standard deviation. The job analysis (normative) method uses ILO mappings of occupations to required skill levels. Horizontal mismatch compares the occupation a worker trained for with their current occupation; only about half of employees report a field of training (IMF, 2026).

3. Findings

3.1 Overeducation is widespread and persistent

Overeducation is most common in general and mid-skill sectors and occupations such as trade, tourism, and services and sales. The IMF finds little change since 2019, indicating structural rather than cyclical mismatch (IMF, 2026).

Source: IMF (2026), from Geostat Labour Force Survey microdata.

3.2 Shortages coexist with surplus

Vacancies have risen in high-skill sectors such as ICT and finance while falling in mid-skill jobs in trade, sales and construction. Firms employing foreign workers increasingly cite lower salaries as a reason, and foreign workers are concentrated in ICT, construction and managerial and professional roles (IMF, 2026).

3.3 Non-labour income weakens work incentives

Using household survey data for 2017–2024 and a doubly robust estimation method, the IMF estimates that remittances lower household employment rates by about 17 percentage points and government transfers (excluding pensions) by about 8 points, with larger effects in female-headed households and on hired employment rather than self-employment (IMF, 2026).

4. Discussion

Argument: the problem is demand, not only education

Overeducation reflects too few productive jobs as much as too many graduates. The IMF attributes mismatch to rapid tertiary expansion amid slow structural transformation and limited development of high-productivity sectors. Education reform alone cannot absorb graduates if the economy does not create skilled jobs.

Argument: vocational skills pay

The growing share of vocationally educated workers in higher-skill jobs suggests that employers reward job-relevant skills. Strengthening vocational education, apprenticeships and employer-led training — and improving career guidance — can reduce mismatch for new entrants.

Counter-argument: transfers protect, and reduce poverty

The IMF’s estimates of reduced employment do not mean that remittances and social transfers are harmful: they protect vulnerable households and reduce poverty. The policy implication drawn by the IMF is not to cut support, but to strengthen links between assistance and activation and to expand childcare to raise women’s participation.

5. Limitations

Mismatch measures based on education and occupation are proxies for skills and do not capture skill quality. Field-of-study results are based on the half of employees who report a field of training. The employment effects of transfers are estimates subject to model assumptions.

6. Conclusion

Georgia combines widespread overeducation with shortages of job-relevant skills — a structural mismatch that has persisted since at least 2019. Closing it requires both better-aligned education and training and an economy that creates more skilled jobs, alongside social support that does not discourage work.

GILS analyses are prepared with AI-assisted drafting. All figures and claims are verified against the cited primary sources and reviewed under the responsibility of the Editor.