Skills mismatch experimental indicators
As no commonly agreed indicators to measure skills mismatch within the European Statistical System (ESS) exist, Eurostat has developed some experimental statistics to foster the policy debate on this issue.
Using EU Labour Force Survey (EU-LFS) data, Eurostat proposes experimental indicators measuring the “vertical” and “horizontal” skills mismatch. “Vertical” measures focus on discrepancies between educational attainment levels (ISCED 2011 1-digit) and occupations (ISCO 2008 1-digit). “Horizontal” measures focus on misalignments between the educational field of the highest level of education attained (ISCED-1999 fields of education and training) and occupations (ISCO 2008 3-digit).
- Vertical skills mismatch: over-qualification rate
The over-qualification rate is calculated by using the number of graduates in tertiary education in
employment (ISCED 2011 level 5 to 8) whose occupations (ISCO 2008 major groups 4 to 9) do not to
require this level of education; see formula below.
- Horizontal skills mismatch by field of education.
The horizontal skills mismatch rate by field of education is calculated by matching mainly broad fields of
education and training (ISCED 1999 fields of education and training) with occupations (ISCO 2008 3-
digit level); see formula below.
Vertical skills mismatch: over-qualification rate
Overqualified workers are defined as employed persons who have attaint tertiary education (ISCED 2011 level 5-8) and who work in occupations for which a tertiary education level is not required; equivalent to the major groups 4 to 9 of the ISCO 2008 classification, including ‘Clerical Support Workers; Services and Sales Workers; Skilled Agricultural, Forestry and Fishery Workers; Craft and Related Trades Workers; Plant and Machine Operators and Assemblers; and Elementary Occupations’. It is is based on the correspondence between occupations and level of education as proposed by the International Labour Organization (ILO) in the International Standard Classification of Occupations; Structure, group definitions and correspondence tables.
This indicator is now used in official statistics as an experimental indicator to measure over-qualification. Although not yet methodologically grounded, it gives useful insight and the intuitive reasoning is straightforward.
Overqualification figures are useful for labour market analyses, as businesses having difficulties in recruiting staff will scale down their requirements in terms of qualifications. The reverse also applies: businesses that have no difficulties in filling a post might increase the required level of qualification. Therefore, overqualification can signal an excess of labour supply from workers with high qualifications or,
on the contrary, labour demand shortages.
Data are presented by economic activity (NACE Rev. 2, 1-digit).