Dr Adele Whelan, ESRI, Educational attainment and skill utilisation in the Irish labour market: An EU comparison presented at the 6th Annual NERI Labour Market Conference in association with the Whitaker Institute, NUI Galway, 22nd May, 2018.

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Educational Attainment and Skill
Utilisation in the Irish Labour Market:
An EU Comparison
DATE
Tuesday, 22nd of May, 2018
EVENT
6th Annual NERI Labour Market
Conference
VENUE
NUI Galway
Authors
Adele Whelan
Paul Redmond

2. Key Questions?
In recent years, the Irish economy has experienced
strong economic growth, accompanied by
significant improvements in the labour market
 What are some of the issues arising now with
respect to the current workforce?
 What are the potential future sources of labour
supply for a growing economy?
2

3. The Current Labour Market
 What are some of the issues arising now with
respect to the current workforce in Ireland?
 How skill intensive are Irish jobs relative to the EU
average?
 How well aligned are the skill levels of workers in
Ireland to job requirements?
 How well aligned are the education levels of
workers in Ireland to job requirements?
3

4. The Future Labour Market
 What are the potential future sources of labour
supply for a growing economy in Ireland?
 Migration: How dependant are we on migrants? How
good are we at attracting the most skilled and
educated migrants?
 Labour market participation: How do the patterns
for Ireland compare with the EU average and what is
the composition of inactive people?
 Unemployment: What is the composition of the
unemployed? 4

5. Data
 Quarterly National Household Survey (QNHS)
 European Skill and Jobs Survey (ESJS)
5

6. The Current Labour Market
6

7. Skill Content of Jobs I
7
0
10
20
30
40
50
60
70
80
EE CY ES LT PT LV GR RO DK SE FR PL HR HU CZ NL MT SK BE UK BG FI SI IE LU DE IT AT
Employees reporting that their job requires
advanced literacy skills (%)
Source: Cedefop European Skills and Jobs Survey, 2014

8. Skill Content of Jobs II
8
0
5
10
15
20
25
30
35
40
45
SK LV EE RO SE ES LT CZ FI DK PT FR CY GR BE BG MT PL HU HR AT IT SI UK IE NL DE LU
Employees reporting that their job requires
advanced numeracy skills (%)
Source: Cedefop European Skills and Jobs Survey, 2014

9. Skill Content of Jobs III
9
0
0.05
0.1
0.15
0.2
0.25
0.3
EE LV RO MT CZ SE SK PL HR ES LT HU BG DK FR IE BE DE LU PT NL FI UK AT IT SI CY GR
Employees reporting that their job requires advanced
ICT skills (%)
Source: Cedefop European Skills and Jobs Survey, 2014

10. Skill Content of Jobs IV
10
0
2
4
6
8
10
12
14
16
RO LV EE ES MT LT SE SK CZ DK FR FI PL PT BE NL HR HU IE BG UK DE AT IT GR CY LU SI
Employees reporting that their job requires
advanced numeracy, literacy & ICT (%)
Source: Cedefop European Skills and Jobs Survey, 2014

11. Skill Match Between Workers and Jobs I
11
0
10
20
30
40
50
60
EE MT LT LV BG LU RO PT CZ HR FR BE SI HU IT SE DK NL SK CY PL FI ES DE IE UK AT GR
Overskilled (%)
Source: Cedefop European Skills and Jobs Survey, 2014

12. Skill Match Between Workers and Jobs II
12
0
2
4
6
8
10
12
14
16
18
HR LU PT DE AT IT ES UK SI NL RO BE SE PL HU DK FR BG CY GR MT IE SK CZ LV FI LT EE
Underskilled (%)
Source: Cedefop European Skills and Jobs Survey, 2014

13. Skill Match Between Workers and Jobs III
13
0
10
20
30
40
50
60
70
80
GR AT UK IE FI DE ES SK CY PL DK NL SE IT HU BE CZ FR SI EE RO HR BG LT PT LV LU MT
Matched (%)
Source: Cedefop European Skills and Jobs Survey, 2014

14. Overeducation Rates (EU-LFS)
14
Legend:
All (Black)
Ireland (Red)
EU-14 (Blue)

15. What we know from Existing Research I
 Mismatch is problematic both for workers and firms
 Both overskilling and overeducation are generally associated with
lower levels of pay and job satisfaction among workers which is
consistent with lost productivity (Quintini, 2011).
 Underskilling is an alternative measure of skill gaps which have also
been shown to be harmful to firm level productivity and labour costs
(McGuinness & Ortiz, 2016).
 Recent studies have shown that Ireland has consistently been a poor
performer in terms of mismatch between workers and jobs (Pouliakas,
2014; McGuinness et al., 2016; McGuinness et al., forthcoming).
15

16. The Future Labour Market
16

17. Future Labour Supply: Migrants I (EU-LFS)
17
Legend:
All (Black)
Ireland (Red)
EU-14 (Blue)

18. Future Labour Supply: Migrants II
18
0
5
10
15
20
25
30
FI RO HU LU LT CZ NL PL ES IT DE LV DK AT SI UK PT FR SE BE EE GR BG HR SK IE CY MT
Share of migrants in employment, 2014 (%)
Source: Cedefop European Skills and Jobs Survey, 2014

19. Future Labour Supply: Migrants III
19
0
10
20
30
40
50
60
70
HR LU EE HU MT CZ AT SK IT PT PL FR BG CY DK GR SI NL ES DE SE BE FI IE LV UK LT RO
% of migrants with tertiary education
Source: Cedefop European Skills and Jobs Survey, 2014

20. Future Labour Supply: Participation Rates
40
45
50
55
60
65
70
75
80
2003Q1
2003Q3
2004Q1
2004Q3
2005Q1
2005Q3
2006Q1
2006Q3
2007Q1
2007Q3
2008Q1
2008Q3
2009Q1
2009Q3
2010Q1
2010Q3
2011Q1
2011Q3
2012Q1
2012Q3
2013Q1
2013Q3
2014Q1
2014Q3
2015Q1
2015Q3
2016Q1
2016Q3
%
Overall - EU-15 excl. Ireland Male - EU-15 excl. Ireland
Female - EU-15 excl. Ireland Overall - Ireland
Male - Ireland Female - Ireland
20
Note: expressed as a % of the population aged 15-74.
Source: EU Labour Force Survey.

21. Future Labour Supply: Composition of the Inactive
%
By Age
15-19 20.3
20-24 7.3
25-34 7.4
35-44 9.6
45-54 10.5
55-64 16.0
64-74 29.0
By Gender
Male 41.2
Female 58.8
By Education Level
Lower Secondary (& below) 50.7
Upper Secondary 24.1
Post Secondary 8.4
Tertiary 16.8
21
Source: Quarterly National Household Survey, 2017 Q2

22. Future Labour Supply: Unemployment Rates
22Note: expressed as a % of the Labour Force aged 15-74
Source: Quarterly National Household Survey
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
Q11998
Q11999
Q12000
Q12001
Q12002
Q12003
Q12004
Q12005
Q12006
Q12007
Q12008
Q12009
Q12010
Q12011
Q12012
Q12013
Q12014
Q12015
Q12016
Q12017
Long-Term Unemployment Rate Unemployment Rate

23. Future Labour Supply: Composition of the Unemployed
All (%) Short-Term Unemployed (%) Long-Term Unemployed (%)
By Age
15-19 9.3 14.1
20-24 16.2 20.1 14.9*
25-34 23.5 24.2 23.0
35-44 20.2 19.6 21.8
45-54 17.7 12.0 23.3
55-74 13.2 10.1 17.0
By Gender
Male 62.4 54.5 69.3
Female 37.6 45.5 30.7
By Education Level
Lower Secondary (& below) 28.2 21.8 33.4
Upper Secondary 32.7 34.5 30.1
Post Secondary 14.2 12.0 17.2
Tertiary 24.9 31.8 19.3
Source: Quarterly National Household Survey, 2017 Q2. Notes: the 65-74 age category is omitted because of the small sample size;
* Two age categories, 15-19 and 20-24, are combined due to small sample sizes.

24. What we know from Existing Research II
 Evidence shows that migrants face both a pay gap and an occupational
gap, suggesting their skills are not being fully utilised within the Irish
labour market (Barrett et al., 2012; Barrett et al., 2016).
 In terms of the ability of activation programmes to reintegrate the
unemployed into the labour market, recommendations have been made
for strengthening policy in this area (McGuinness et al., 2010; Kelly et al.,
2015; Martin, 2014). Activation services have been overhauled with the
introduction of the Intreo services but the evidence has yet to emerge
with respect to how effective these changes have been.
 The main factors shaping women’s participation at the individual level are
wage levels, education, family status (i.e. number and age of children) and
age. The effect of wage on participation is stronger for women with low
qualifications (Russell et al., 2009). Issues related to affordable childcare
are an important factor in this area.
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25. Outstanding Questions
 What are the potential explanations for Ireland’s poor performance
in terms of skill matching?
 What are the implications of Brexit for migration?
 Are there strategies that could potentially reintegrate the
unemployed and inactive, particularly those with high skills, back
into employment?
 Going forward, is the pressure on the labour market more likely to
come from skill shortages or labour shortages?
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