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Skills and Jobs Mismatches in Low- and Middle-Income Countries

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Skills and Jobs Mismatches in Low- and Middle-Income Countries Skills and jobs mismatches in low- and middle-income countries Editors Paul Comyn Olga Strietska-Ilina Authors Adele Bergin Judith Delaney Michael Handel Seamus McGuinness Olga Kupets Konstantinos Pouliakas Paul Redmond ISBN 978-92-2-131561-2 ILO Skills and jobs mismatches in low- middle-income countries 9 78922 1 315612 Skills and jobs mismatches in low- and middle-income countries Copyright © International Labour Organization 2019 First published 2019 Publications of the International Labour Office enjoy copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, short excerpts from them may be reproduced without author‑ ization, on condition that the source is indicated. For rights of reproduction or translation, application should be made to ILO Publications (Rights and Licensing), International Labour Office, ‑CH 1211 Geneva 22, Switzerland, or by email: [email protected]. The International Labour Office welcomes such applications. Libraries, institutions and other users registered with a reproduction rights organization may make copies in accordance with the licences issued to them for this purpose. Visit www.ifrro.org to find the reproduction rights organization in your country. Skills and jobs mismatches in low- and middle-income countries International Labour Office – Geneva: ILO, 2019 ISBN 978‑92‑2‑131561‑2 (print) ISBN 978‑92‑2‑131562‑9 (web pdf ) International Labour Office. skills mismatch/skill requirements/job placement/level of qualification/skill obsolescence/labour force survey/education/young worker/recommendation 13.01.3 ILO Cataloguing in Publication Data The designations employed in ILO publications, which are in conformity with United Nations prac‑ tice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the legal status of any country, area or terri‑ tory or of its authorities, or concerning the delimitation of its frontiers. The responsibility for opinions expressed in signed articles, studies and other contributions rests solely with their authors, and publication does not constitute an endorsement by the International Labour Office of the opinions expressed in them. Reference to names of firms and commercial products and processes does not imply their endorsement by the International Labour Office, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval. ILO publications and digital products can be obtained through major booksellers and digital distri‑ bution platforms, or ordered directly from ilo@turpin‑distribution.com. For more information, visit our website: www.ilo.org/publns or contact [email protected]. Produced by the Publications Production Unit (PRODOC) of the ILO. Graphic and typographic design, layout and composition, proofreading, printing, electronic publishing and distribution. PRODOC endeavours to use paper sourced from forests managed in an environmentally sustainable and socially responsible manner. Code: CMD‑CORR‑SCR‑ICA Skills and jobs mismatches in low- and middle-income countries International Labour Office • Geneva Editors Paul Comyn, International Labour Office Olga Strietska-Ilina, International Labour Office Authors Adele Bergin, co‑author of Chapter 3 Economic and Social Research Institute Judith Delaney, co‑author of Chapter 6 Economic and Social Research Institute Michael Handel, author of Chapter 4 Northeastern University Seamus McGuinness, co‑author of Chapters 2, 3 and 6 Economic and Social Research Institute Olga Kupets, author of Chapter 5 with inputs to Chapter 6 Kyiv School of Economics Konstantinos Pouliakas, co‑author of Chapter 2 European Centre for the Development of Vocational Training Paul Redmond, co‑author of Chapters 2, 3 and 6 Economic and Social Research Institute Foreword Skills mismatch is a concern for policy‑makers, employers and workers alike. It is a recurring theme in vocational education and skills development, with many policy initiatives launched to address the skills mismatch challenge. The frequency with which skills mismatch is referred to creates the impression that it is a major policy issue and one which generates considerable policy scrutiny over the performance of education and training systems. High and persistent levels of unemployment, together with job vacancies that remain unfilled, are often attributed to mismatches between jobs and skills. However, the idea of skills mismatch does not always explain why employers are unable to fill available vacancies: uncompetitive wages and poor working conditions are often the main cause. Besides, skills mismatches are driven not only by low‑quality education but also demographic change, rapid technological development, new sources of job creation and new forms of work organization. Regardless of the cause, skills mismatch can negatively affect labour market outcomes, workers’ productivity, competitiveness and economic growth. The concept of skills mismatch, however, is often not well understood. The term is broad and can relate to many forms of labour market friction, including vertical mismatch, skill gaps, skill shortages, field of study (horizontal) mismatch and skill obsolescence. These various forms of skills mismatch are very different in terms of how they manifest themselves, how they are measured, what causes them and how their consequences are felt. Some relate to mismatches experienced by employees, others to employers and firm‑level difficulties. Some skill mismatch concepts are measured subjectively while others are derived from existing data. Many of the mismatch indicators adopted in the literature have drawbacks and various approaches used to measure the same type of mismatch are often poorly correlated. All of this suggests that the use of the term “skills mismatch” within a policy context is highly problematic. Policy debates on skills mismatch rarely differentiate between the different forms of mismatch and often rely on inadequate or unrelated data, particularly in low‑ and middle‑income countries. In many cases, policy initiatives seem to focus on precisely the areas for which there is least evidence. The purpose of this book is to unpack the issue of skills mismatch and present new data on the phenomenon in low‑ and middle‑income countries. In doing so, it highlights the need for more nuanced policy responses to address the actual policy v Skills and jobs mismatches in low- and middle-income countries challenges that exist in these labour markets; it also outlines key policy initiatives that demand more attention than they currently receive. In this book, the authors present a comprehensive analysis of the current pos‑ ition of the literature on skills mismatch and highlight areas which are relatively underdeveloped and may warrant further research. They also present new research using data from national labour force surveys, the ILO and MasterCard Foun‑ dation School‑to‑Work‑Transition Surveys, and the World Bank’s Skills Towards Employability and Productivity Survey to examine in detail the incidence of various combinations of skills mismatch across low‑ and middle‑income countries. Sangheon Lee Director, ILO Employment Policy Department vi Acknowledgements This book is based on research outputs produced in the framework of the ILO Global Product “Mismatches between jobs and skills” implemented under policy Outcome 1 “More and better jobs for inclusive growth and improved youth employ‑ ment prospects”. The book has been edited by Paul Comyn and Olga Strietska‑Ilina, Senior Skills and Employability Specialists in the Employment Policy Department of the ILO in Geneva. Chapter 2 was authored by Seamus McGuinness (ESRI), Konstantinos Pouliakas (Cedefop) and Paul Redmond (ESRI). Chapter 3 was authored by Seamus McGuinness, Paul Redmond and Adele Bergin of ESRI. Chapter 4 was authored by Michael Handel of Northeastern University and Chapter 5 by Olga Kupets of Kyiv School of Economics. Chapter 6 was authored by Seamus McGuinness, Paul Redmond and Judith Delaney of ESRI, with important inputs from Olga Kupets and the book editors. Useful comments and suggestions were provided by two anonymous review‑ ers, as well as by Sara Elder, Valentina Stoevska, Frédéric Lapeyre and Bolormaa Tumurchudur‑Klok of the ILO and Alexandria Valerio of the World Bank. Bolormaa Tumurchudur‑Klok (ILO) supported technical editing. Gary Hors‑ ley, AC Marketing, edited the language. Annette Brandstater (ILO) formatted the manuscript. Yoshie Noguchi, Aurelio Parisotto, Clemente Pignatti, Markus Pilgrim, Maria Prieto, Marco Principi, Gianni Rosas and Valerio De Stefano also contributed significantly to improving the quality of the manuscript. The entire manuscript was reviewed by Matthieu Cognac, Sara Elder, Susana Puerto Gonzalez and two anony‑ mous external peer reviewers. Stephen Bazen, Aix‑Marseille University, Werner Eichhorst, Bonn Institute of Labour Economics, and Seamus McGuinness, Economic and Social Research Institute, Dublin, also provided extremely helpful comments on background papers presented at workshops held at the ILO in November 2015 and February 2016. vii Contents Foreword ...................................................................................................... v Acknowledgements ........................................................................................ vii Abbreviations .............................................................................................. xv Executive summary
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