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The Evolving Supply and Demand of Skills in the Labour Market

Explore the dynamic balance between labour demand and supply as it relates to skills in the EU market. Delve into theories driving change, risks of mismatch, and implications for the future. Discover potential equilibria and consequences on income inequality and job satisfaction.

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The Evolving Supply and Demand of Skills in the Labour Market

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  1. The Evolving Supply and Demand of Skills in the Labour Market Ilaria Maselli CEPS

  2. In this presentation Labour demand and supply with respect to education Research question: are there too many or not enough skills?

  3. Evolution of labour demand Low qualified jobs Medium skilled jobs Job polarisation in EU27, 2000-2010.

  4. ISCO classification Low 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

  5. Labour demand: 3 theories Skill-biased technological change Routinisation hypothesis Globalisation - offshoring

  6. Labour supply: educational expansion High skilled active pop 25-64 Medium skilled active pop 25-64 Low skilled active pop 25-64 EU27, 2000-2010

  7. Demand and Supply wrt Skills EU27, 2000-2010

  8. Demand and Supply wrt Skills EU27, 2010-2020 (CEDEFOP projections)

  9. Demand and Supply wrt Skills

  10. Is there a risk of vertical mismatch?

  11. RISK 1: Enough graduate jobs for graduate workers? Employment rate of high skilled =83% No evidence that employment rate of HS is lower in countries that expanded educ faster

  12. RISK 1: Enough graduate jobs for graduate workers? Yes BUT increase in heterogeneity: For ex: returns from education more differentiated by subject

  13. RISK 2: shortage of low skilled jobs? No Korean scenario: lack of people to take DDD jobs In 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)

  14. RISK 3: Shrinking middle In Germany has shrunk from 62% to 54% of the population Same in Denmark: 31.5% to 28.6% of the population

  15. Conclusions (1): EU vs countries • EU27 as a whole in equilibrium  • But cross-country differences  • Some countries will continue to deal with low skilled unemployment (Southern + DK) • Others 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 ones

  16. Conclusions (2): shrinking middle Shrinking middle = main looser: What are the Consequences? higher income inequality Over-education Less job satisfaction? What about the financing of welfare?

  17. About NEUJOBS • Large scale research project financed under FP7 (SSH) • Objective = map implications for employment of - Socio-ecological Transition (SET), from industrial to post-industrial and beyond… - Societal transition (ageing, new family structures), key actors in transition (women, elderly, migrants, Roma) - New territorial dynamics (agglomeration and dispersion) - Skills transition (mass higher education, green skills, life-long learning)

  18. To stay in touch with NEUJOBS: • www.neujobs.eu • visit our blog: http://blog-neujobs.eu/ • Fan page on Facebook • Join group on Linkedin

  19. Thank you for the attention

  20. Vertical mismatch: risks Shortage of low skilled workers = ‘Korean scenario’ Low skilled unemployment Middle skilled ‘displacement’ Overqualification of high skilled Equilibrium!

  21. Possible equilibria

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