Sergio Desefanis - Measuring skills supply and demand - The OECD LEED diagnostic tool

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Presentation by by Sergio Destefanis, Professor of Economics, Department of Economics, University of Salerno, Italy.

9th Annual Meeting of the OECD LEED Forum on Partnerships and Local Governance (Dublin-Kilkenny, Ireland), 26/27 March 2013.

http://www.oecd.org/cfe/leed/9thfplgmeeting.htm

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Sergio Desefanis - Measuring skills supply and demand - The OECD LEED diagnostic tool

  1. 1. 9th Annual Meeting IMPLEMENTING CHANGE: A NEW LOCAL AGENDA FOR JOBS AND GROWTH In co-operation with the EU Presidency, Irish Government and Pobal 26-27 March 2013, Dublin-Kilkenny, IrelandWORKSHOP G: DATA FOR POLICY DESIGN AND IMPACT ASSESSMENT Sergio DestefanisProfessor of Economics, Department of Economics, University of Salerno, Italy
  2. 2. OECD-LEED 9th Annual Meeting 26-27 March 2013, Dublin-Kilkenny, Ireland Sergio Destefanis destefanis@unisa.it (Università di Salerno and CSEF, Italy) Measuring skills supply and demand - OECD LEEDdiagnostic tool and its application in selected regions
  3. 3. Outline• The OECD-LEED diagnostic tool: definition and conceptual framework• Background• Applications  Italy  USA  Ireland• Some concluding remarks
  4. 4. The OECD-LEED diagnostic tool: definitionAs part of its Skills for Competitiveness project, 2009-2011, theOECD LEED Programme developed a statistical diagnostic toolgeared to understand the balance between skills supply anddemand at the local level (TL3/NUTS3 or travel to work areas).According to this approach, local labour markets can fall into fourdifferent situations: low skills equilibrium, skills shortages, skillssurplus, high skills equilibrium.
  5. 5. The OECD LEED diagnostic tool SKILLS GAPS AND HIGH SKILLED SHORTAGES EQUILIBRIUMDemand LOW SKILLED SKILLS SURPLUS EQUILIBRIUM Supply
  6. 6. Conceptual frameworkSKILLS SHORTAGES HIGH SKILLED EQUILIBRIUMLow % post-secondary education High % post-secondary educationHigh % high skilled occupations High % high skilled occupationsHigh wages/high productivity High wages/high productivityLOW SKILLED EQUILIBRIUM SKILLS SURPLUSLow % post-secondary education High % post-secondary educationLow % high skilled occupations Low % high skilled occupationsLow wages/low productivity Low wages/low productivity
  7. 7. Background• The diagnostic tool has been tested within the Skills for Competitiveness project for Canada, Italy and the UK.• As a contribution of the LEED programme to the OECD Skills Strategy, the diagnostic tool approach has been extended to localities in all OECD countries.• Available online there are currently data for 12 countries: Belgium, Canada, Czech Republic, Denmark, Finland, Korea, Italy, Netherlands, Norway, Sweden, UK, USA  see skills.oecd.org• Indicators for other countries (Australia, Austria, France, Greece, Hungary, Slovenia) are virtually ready.
  8. 8. ApplicationsThere are various fundamental issues in implementing the diagnostic tool:• What are the proxies of skills supply and demand?• Do we select country-wide or sectoral medians in order to single out the quadrants?• At which territorial level is the analysis to be carried out?Below we illustrate some practical answers to these questions, also highlighting some examples from Italy, USA, Ireland.
  9. 9. Labour market performance according to thediagnostic tool typology – Italy 2001-2009
  10. 10. Skills supply and demand in Veneto and Campania (Italy) 2001
  11. 11. Skills supply and demand in Veneto and Campania (Italy) 2009
  12. 12. Multinomial Logit model – Italy 2001 and 2009.What determines a provinces location in a given quadrant? SKILLS SHORTAGES HIGH SKILLED EQUILIBRIUM Correlates: Correlates: Strong 2-ary sector Strong 3-ary sector Large population Large population Lower share of temps “Attractive” university LOW SKILLED EQUILIBRIUM SKILLS SURPLUS Correlates: Correlates: – “Attractive” university (baseline case)
  13. 13. Best practices #1 The Distretto Calzaturiero del Brenta• Involvement of many stakeholders: ACRIB (a local employers association), Politecnico Calzaturiero (private school of arts and crafts), local unions, universities.• Vocational training for all skills levels• Highly successful product innovation, enacted by a network of fairly small firms  sharing costs• It tied firms from Venezia and Padova in one single organisation, opened the way for cooperative mechanisms uniting employers and workers, and for the establishment of an innovative Territorial Council (Consulta Territoriale).
  14. 14. Best practices #2• The 2011 Development Pact (Patto per lo Sviluppo...) from Treviso province.• This is a young reality, also exemplifying what is happening in other areas (especially in Italys North- east).• It is characterised by territorial joint (NOT firm-level) wage bargaining and from a co-operative employers- worker approach to employment and development.
  15. 15. Skills supply and demand in metro areas – unemployment rate, 2011 - California
  16. 16. Skills supply and demand in metro areas – unemployment rate, 2011 Michigan
  17. 17. Skills supply and demand in Ireland, 2010
  18. 18. Skills supply and demand in Ireland, 2012
  19. 19. Concluding Remarks• The diagnostic tool proved useful in classifying local areas• There seems to be a clear relationship between an areas position in the diagnostic tool and the unemployment rate. This chimes in with various pieces of concurrent evidence (e. g. Brookings Institution, 2012)• A similar relationship with other performance measures is being tested• Much will be gained from the comparison of different countries (with areas of different size), different proxies and analyses of the diagnostic tool distributions. Measures of dispersion may also be useful in this respect.

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