A new approach to skills mismatch

Abstract

Skills mismatch - the sub-optimal use of an individual's skills in their occupation - can be a source of dissatisfaction for workers and a brake for productivity growth. In our view, a difference in the level of skills within an occupation is not sufficient to infer that a skills mismatch exists. Since skills-mismatch is the result of a disparity between the supply and demand of labour, the quantifying of skills-mismatch must therefore be based on the mechanisms involved in this disparity. We propose to include in our measurement the level of education and field of study, which are key markers of an individual's skill level in the labour market. This makes it possible to identify, among individuals whose skill level differs from others within an occupation, those whose training profile can (or cannot) explain this situation. Through using the OECD PIAAC 2012 survey, this paper first identifies with data for France, individuals who present an apparent skills mismatch according to the framework proposed. Following an international comparison of “apparent skills mismatch rates”, we conclude this study by observing how the different groups identified differ in terms of how they perceive their employment situation as well as their individual characteristics.