Analytical web note : measuring skills mismatch; 7/2015

This note presents indicators that can be useful for the regular monitoring of skills mismatches across EU Member States. It distinguishes three broad groups of skills mismatch indicators: indicators of macroeconomic skills mismatch, specific skills shortages, and on-the-job skills mismatch. The indicators of macroeconomic skills mismatch measure the discrepancy between employment outcomes for workers with low, medium, and high skills. This type of indicator is most useful for informing macroeconomic policy and generally identifies countries in which individuals with low skills face significant challenges in the labour market. Specific skills shortage indicators reflect shortages of very specific skills profiles, as experienced by employers trying to recruit such profiles. Indicators of on-the-job skills mismatch measure the discrepancy between the skills individual workers have and those that are needed for their job. The latter two sets of indicators are most useful to inform policy in designing and maintaining a well-functioning education and training system (including adult education) that provides high-quality education and is responsive to the needs of today's as well as tomorrow's labour market.