Understanding Local Level Skill Mismatches

We will use quantitative analysis to investigate these issues. In the literature on demand and supply of skills, there are three main approaches. One uses data on wage premiums for particular types of skills, usually graduates versus non-graduates, to back out demand and supply effects (e.g. Stansbury et al.,2023, O’Mahony et al., 2023). An alternative approach is to measure skill mismatches directly, by linking them them with occupations, fields of study, or other aggregate data. For example, it is common to classify occupations by their educational requirements, based on the average (mean or modal) education level in that occupation, and then calculate the proportion of employees whose education levels are above or below these averages. When focusing on graduates, skill mismatches have also been evaluated using information on average wages by degree subject and industry of main employment (Liu et al. 2016). Information on industrial sector mismatch can be particularly useful in conjunction with information on the industry concentration in different regions to improve our understanding of regional opportunities for graduates and regional inequalities (Robinson et al. 2023). The different conceptions of mismatch can then be related to factors that affect demand and supply. In this study, we will focus on the different ways we can quantify mismatches by examining demand and supply separately.

Augustin de Coulon is also an Co-Investigator on this project