Skill mismatch comparing educational requirements vs attainments by occupation

Purpose
The purpose of this paper is to overcome the problems that skill mismatch cannot be measured directly and that demand side data are lacking. It relates demand and supply side characteristics by aggregating data from jobs ads and jobholders into occupations. For these occupations skill mismatch is investigated by focussing on demand and supply ratios, attained vis-à-vis required skills and vacancies’ skill requirements in relation to the demand-supply ratios.

Design/methodology/approach
Vacancy data from the EURES job portal and jobholder data from WageIndicator web-survey were aggregated by ISCO 4-digit occupations and merged in a database with 279 occupations for Czech Republic, being the only European country with disaggregated occupational data, coded educational data, and sufficient numbers of observations.

Findings
One fourth of occupations are in excessive demand and one third in excessive supply. The workforce is overeducated compared to the vacancies’ requirements. A high demand correlates with lower educational requirements. At lower occupational skill levels requirements are more condensed, but attainments less so. At higher skill levels, requirements are less condensed, but attainments more so. Educational requirements are lower for high demand occupations.

Research limitations/implications
Using educational levels is a limited proxy for multidimensional skills. Higher educated jobholders are overrepresented.

Practical implications
In Europe labour market mismatches worry policy makers and Public Employment Services alike.

Originality/value
The authors study is the first for Europe to explore such a granulated approach of skill mismatch.