The Evolving Supply and Demand of Skills in the Labour MarketIlaria MaselliCEPS

In this presentationLabour demand and supply with respect to educationDemand and its driversSupplyVertical mismatch?Future risks

Research question: are there too many or not enough skills?

Evolution of labour demandJob polarisation in EU27, 2000-2010.

Low qualified jobsMedium skilled jobs

ISCO classificationLow skilled jobs = cleaners, labourers in construction, manufacturing and transport and food preparation assistants.Medium qualified jobs = plant and machine operators, electrical and electronic trades workers and craft and related trades workers.High profile jobs = managers, professionals, technicians

Evolution of labour demand Italyvs Belgium (2000-2010)

Low qualified jobsMedium skilled jobsHigh skilled jobsHigh skilled jobsMedium skilled jobs

Labour demand: 3 theoriesSkill-biased technological changeRoutinisation hypothesisGlobalisation - offshoring

Labour demand

Job polarisationOtherBG, DE, EL, ES, FR, IT, CY, HU, MT, NL, AT, PL, RO, SL, FI, SE, UKBE, CZ, DK, ET, IE, LV, LT, LX, PT, SK

Labour supply: educational expansionEU27, 2000-2010Low skilled active pop 25-64High skilled active pop 25-64Medium skilled active pop 25-64

Labour supply: educational expansion

Demand and Supply wrt SkillsEU27, 2000-2010

Demand and Supply wrt SkillsEU27, 2010-2020 (CEDEFOP projections)

Demand and Supply wrt Skills

Vertical mismatch: risksShortage of low skilled workers = Korean scenarioLow skilled unemploymentMiddle skilled displacementOverqualification of high skilledEquilibrium!

Vertical mismatch: risks

Enough graduate jobs for graduate workers? Employment rate of high skilled high everywhere (around 80%)

Enough graduate jobs for graduate workers? No evidence that employment rate of HS is lower in countries that expanded educ faster

Enough graduate jobs for graduate workers?

Yes BUT increase in heterogeneity:

For ex: returns from education more differentiated by subject

Vertical mismatch: risks

Low skilled jobsNo Korean scenario: lack of people to take DDD jobsIn some countries still more low skilled workers that low skilled jobs => risk of low skilled unemployment high despite educational expansion (EL, IT, PT, MT, DK)

Vertical mismatch: risks

Shrinking middleIn Germany has shrunk from 62% to 54% of the populationSame in Denmark: 31.5% to 28.6% of the population

Conclusions (1): EU vs countriesEU27 as a whole in equilibrium But cross-country differences ...high mobility would solve the problem (and Eurozone crisis in part also!)

Some countries will continue to deal with low skilled unemployment (Southern + DK)

Conclusions (2): shrinking middleOthers will face a new problem: excess of middle skilled workers=> what will they do?- Compete for higher skilled jobs (if possible)- Compete for lower skilled onesInnovation is @ workcreative destruction (Schumpeter)

Conclusions (3): shrinking middle again!Shrinking middle = main looser:What are the Consequences? higher income inequalityOver-education Less job satisfaction? Sociological and political science problems to be explored. For example, concerning the financing of welfare?

Conclusions (4): what we may not catchWe need further research to understand the skills interplay:

Ex: the definition of a graduate job is not frozen in time: what we consider a graduate job today, like a journalist, did not require tertiary education twenty years ago. The same applies to non-graduate jobs: with the help of technology some former graduate jobs have been de-skilled (accounting for example) and the quality of other low skilled jobs has been increased. (Elias and Purcell 2004)

Thanks for the attention

To stay in touch with NEUJOBS:More to come on this: www.neujobs.eu visit our blog: http://blog-neujobs.eu/

Fan page on FacebookJoin group on Linkedin

*