connecting you to the future skills supply forecast working group i frank cörvers (roa) and hector...

connecting you to the future

Skills Supply forecast

Working group I

Frank Cörvers (ROA) and Hector Pollitt (CE)

21-22 February 2008, Thessaloniki

Skills for Europe’s Future

Cedefop Skillsnet Agora conference

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21-22 February 2008, Thessaloniki

Skills for Europe’s Future

Cedefop Skillsnet Agora conference

Labour supply forecast by age and gender – E3ME

Labour supply forecast of population by

qualification

Feedback from individual country experts and Cedefop

Labour supply forecast of graduates by

qualification

Final report

Interim report

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Role of the E3ME model in the project

• To provide the link between economic development and overall labour supply

• This forms an input to modelling the supply of skills

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Description of E3ME

• Econometric model– covers EU27 + Norway and Switzerland

– based on the system of national accounts

– large sectoral disaggregation

– long and short term specification

• For more details see www.e3me.com

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Data Sources

• Eurostat National Accounts data

• OECD Structural Analysis (STAN)

• Eurostat Labour Force Survey

• Other– AMECO database

– national statistical agencies

• Model parameters are estimated on time series covering 1970-2006– 1993-2006 for New Members

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Model Enhancements

• Labour supply currently modelled for male and female population

• This will be further disaggregated into age groups

• E3ME’s equations will be modified to take into account factors relevant to particular age groups, such as pensions and training opportunities

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Forecasting Labour Supply

• Population projections to match Eurostat baseline

• Economic forecast to match EC publication

• Labour participation rates are modelled as a function of:– cyclical indicators (output)

– average wage rates

– unemployment rate

– benefit rates

– economic structure (services / manufacturing)

• Initial forecasts will be discussed with individual country experts before being finalised

• Two scenarios will be run to test key sensitivities

Forecasting labour supply of population by qualification

• Predicting the distribution of people by qualification

• Use of multi-logit qualification model

• Cross sectional data from the Labour Force Survey (LFS)

Multi-logit method

• Focus on Stocks of people by qualification level

• Propensity of a representative individual to obtain a level of highest qualification

• Use of multinomial logistic regression model• Independent variables:

− age − gender

− time trends− country

Data issues

• Use of LFS microdata

• EU-27 (plus Norway and Switzerland)

• Three levels of qualification:− low: ISCED 1, 2, 3C− intermediate: ISCED 3,4− high: ISCED 5,6

Forecasting labour supply of graduates by qualification

• Participation ratio method, focusing on flows

• Predictions of:

− Flows through the education system

− Transitions from education to the labour market

• Complementary to multi-logit method by IER

Data issues

• EU-27 (plus Norway and Switzerland)• Three levels of qualification:

− low: ISCED 1, 2, 3C− intermediate: ISCED 3,4− high: ISCED 5,6

• Fields of education whenever possible• Aggregate data 1998-2005:

Unesco/OECD/Eurostat

Graduation rates

• Two broad age groups: 15-19 and 20-24 years old

• ‘Estimation’ of trends in graduation rates per country and education

• Use of E3ME population forecasts

• Check with IER forecasts

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Contact details for further information:

21-22 February 2008, Thessaloniki

Skills for Europe’s Future

Cedefop Skillsnet Agora conference

Rob WilsonInstitute for Employment

ResearchUniversity of WarwickCOVENTRY, CV4 7AL

United KingdomR.A.Wilson@warwick.ac.uk

Tel: +(44) 2476-523530

Frank CörversResearch Centre for

Education and the Labour Market

Maastricht UniversityThe Netherlands

F.Coervers@roa.unimaas.nlTel: +(31) 43-3883647

Ben GardinerCambridge Econometrics

Covent GardenCB1 2HS Cambridge

United Kingdombg@camecon.com

Tel: +44 1223 464378