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).
- Detailed data on over-qualification rate by economic activity for the period 2008 to 2016.
More information on over-qualification rates can be found in the article Employment and Labour Demand.
Horizontal skills mismatch: field of education
The rate of skills mismatch by field of education is defined as the discrepancy between a person's current occupation and their field of education related to the highest level of education attaint.
After matching fields of education according to the ISCED classification of fields of education and training to occupations at ISCO 2008 3-digit level, persons working outside their field of education are considered as individuals with horizontal skills mismatch. The criterion used for the matching of occupational ISCO codes with the fields of education is the assumed congruence of skills acquired through education and the skills needed for the job.
Skills mismatch by field of education may be relevant for labour market analyses since 'non-matched' persons (i) might face frustration because of the lack of a direct return to the effort dedicated to study and (ii) may generate economic losses for businesses as a result of lower efficiency and/or the additional costs of acquiring specific skills on the job.
The data presented here for the period 2014 to 2016 and cover both persons in employment aged 15 to 34 years who have attaint at least secondary education (ISCED levels 3 to 8) and persons in employment aged 25 to 34 years who have attaint tertiary education (ISCED level 5 to 8).
Please note that horizontal skills mismatch cannot be calculated for all persons in employment because the information about the field of education is only collected if the person has successfully completed his/her highest level of education within the last 15 years.
Fields of education are defined according to the ISCED fields of education and training classification (ISCED-F 1999 applicable for the years 2014 and 2015, ISCED-F 2013 as from 2016 onwards). Occupations are identified according to the ISCO 2008 categories at 3-digit (minor groups).
- Detailed data on the rate of horizontal skills mismatch by field of education for the period 2014 to 2016.
A similar methodology had been applied for the ad-hoc module of the EU-LFS 2000 which, focussed on the transition from school to working life.
For 2014 and 2015 data, click here to download the table illustrating the new matching exercise of ISCED-F 1999 fields of education and ISCO 2008 occupation at 3-digit codes performed to calculate the HSMR experimental indicator.
For 2016 data, click here to download the table illustrating the new matching exercise of ISCED-F 2013 fields of education and ISCO 2008 occupation at 3-digit codes performed to calculate the HSMR experimental indicator.