sergio desefanis - measuring skills supply and demand - the oecd leed diagnostic tool
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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, Ireland
9th Annual Meeting
WORKSHOP G: DATA FOR POLICY DESIGN AND IMPACT ASSESSMENT
Sergio Destefanis Professor of Economics, Department of Economics, University of Salerno, Italy
Sergio Destefanis destefanis@unisa.it
(Università di Salerno and CSEF, Italy)
Measuring skills supply and demand - OECD LEED diagnostic tool and its application in selected regions
OECD-LEED 9th Annual Meeting
26-27 March 2013, Dublin-Kilkenny, Ireland
Outline
• The OECD-LEED diagnostic tool: definition and conceptual framework
• Background
• Applications Italy
USA
Ireland
• Some concluding remarks
The OECD-LEED diagnostic tool: definition
As part of its Skills for Competitiveness project, 2009-2011, the OECD LEED Programme developed a statistical diagnostic tool geared to understand the balance between skills supply and demand at the local level (TL3/NUTS3 or travel to work areas).
According to this approach, local labour markets can fall into four different situations: low skills equilibrium, skills shortages, skills surplus, high skills equilibrium.
SKILLS GAPS AND SHORTAGES
HIGH SKILLED EQUILIBRIUM
LOW SKILLED EQUILIBRIUM
SKILLS SURPLUS Dem
and
The OECD LEED diagnostic tool
Supply
SKILLS SURPLUS LOW SKILLED EQUILIBRIUM
SKILLS SHORTAGES HIGH SKILLED EQUILIBRIUM
Conceptual framework
Low % post-secondary education
High % high skilled occupations
High wages/high productivity
High % post-secondary education
High % high skilled occupations
High wages/high productivity
Low % post-secondary education
Low % high skilled occupations
Low wages/low productivity
High % post-secondary education
Low % high skilled occupations
Low wages/low productivity
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.
Applications
There 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.
Labour market performance according to the diagnostic tool typology – Italy 2001-2009
Skills supply and demand in Veneto and Campania (Italy) 2001
Skills supply and demand in Veneto and Campania (Italy) 2009
SKILLS SURPLUS LOW SKILLED EQUILIBRIUM
SKILLS SHORTAGES HIGH SKILLED EQUILIBRIUM
Correlates:
– (baseline case)
Correlates: “Attractive” university
Multinomial Logit model – Italy 2001 and 2009. What determines a province's location in a given quadrant?
Correlates: Strong 2-ary sector
Large population
Correlates: Strong 3-ary sector
Large population
Lower share of temps
“Attractive” university
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).
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 Italy's 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.
Skills supply and demand in metro areas – unemployment rate, 2011 - California
Skills supply and demand in metro areas – unemployment rate, 2011 Michigan
Skills supply and demand in Ireland, 2010
Skills supply and demand in Ireland, 2012
Concluding Remarks • The diagnostic tool proved useful in classifying local areas
• There seems to be a clear relationship between an area's 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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