1. Directors of Social Statistics Board (DSSB) 4-5 December 2017
Item 4 Data on skills
Directors of Social Statistics Board (DSSB) 4-5 December 2017

2. New Skills Agenda for Europe
10 actions are designed to (…) improve information and understanding of trends and patterns in demands for skills and jobs to enable people make better career choices, find quality jobs and improve their life chances, since:
40% of Europeans lack the basic digital skills necessary for today's fast-changing labour market.
70 million Europeans lack sufficient reading, writing and numeracy skills.
Many highly-qualified young people work in low-skilled jobs when 40% of European companies say they can't find the right people to grow their business

3. New Skills Agenda for Europe
In the context of the 'New Skills for New Job' initiative, the objectives related to skills focus on the following actions:
Better promotion of the anticipation of future skill needs;
Better development of the matching between skills and labour market needs;
Bridging the gap between education and work.

4. Technical Group
In January 2016, a Technical group on statistics for skills and human capital chaired by Eurostat has been setup as an inter-service technical group of the Commission, including members of several Commission services – DG CNET, DG EAC, DG EMPL – and Cedefop.
The technical group was given the
mandate to provide a report containing:
a conceptual framework on how to approach
the area of skills-related statistics and
a proposed roadmap for the development
of skills statistics within the
European Statistical System.

5. Eurostat short term objective(s)
According to the proposed roadmap, Eurostat short term objectives include:
"Explore ways to better utilise existing data to produce derived measures of skills demand, skills supply, mismatches and skills development. This should be done systematically and refer mainly to possible new indicators, and
gather all the ESS data on the topic (those currently available and the potential developments) in a single entry point, which could take the format of a dedicated section on skills statistics. A visualization tool which can display several indicators simultaneously and facilitate understanding of the contents could also be developed."

6. Eurostat compliance
In August 2017, Eurostat has published a dedicated section on skills-related statistics available at which:
describes the conceptual framework and the approaches to statistical measurement of skills,
summarizes all the information available within the ESS in relation to the topic, and
proposes experimental measures of skills mismatch – already validated by the METAC – since currently, no official statistics and indicators for measuring skills mismatch within the ESS exist.

7. The methodological framework

8. Skills dimensions
Skills supply: Existing skills of the labour force (i.e. measuring the level of skills of the population and its changes);
Skills demand: Skills needed by employers (i.e. measuring the level of skills needed in the economy);
Skills development: Skills developed by participation in education and training activities;
Skills mismatch: Measurement of the gap between demand and supply of skills (macro-level) as well as conditions of workers, jobs or vacancies (micro-level) that can be defined in the following ways:
Vertical Mismatch: mismatches between workers' education level and their occupation.
Horizontal Mismatch: mismatch between workers' fields of education and their occupation.

9. Skills measurement approaches
Indirect measures are proxies of a certain level of skills. For instance, skills assumed to be acquired through formal education or skills needed for employment in a certain profession (using data on qualifications and occupations); Direct measures are direct assessments of skills through e.g. test scores for skills supply or use data on newly employed and job vacancies for the demand side; Self-reported level of skills refers to people's self-evaluations of skills (e.g. subjective level of digital skills).

10. The state of the art within the ESS

11. The figures available (Nov 2017)

12. SKILLS SUPPLY
1. Population, broken down by sex, age group and educational attainment level.
2. Early leavers from education and training by sex and labour status for the age group
3. Number (and distribution) of graduates at different education level and programme orientation by sex, age and field of education.
4. Individual level of digital and soft skills, by labour market status (calculated from ICT usage in households and by individuals
SKILLS DEVELOPMENT
5. Participation rate in formal and non-formal training by sex, age group, level of educational attainment and labour status.
6. Adults in continuing vocational training or in lifelong learning (in formal and non-formal education, broken down by sex, age group, sectors).
SKILLS DEMAND
7. Employment by sex, age, occupation and educational attainment level.
SKILLS MISMATCH
8. Over-qualification rate: people with tertiary education (ISCED to 8) working in occupations for which tertiary education is not required (ISCO 2008 major groups 4 to 9)

13. Sources EU Labour Force Survey (EU-LFS);
UNESCO OECD Eurostat (UOE) joint Data Collection;
EU Community Survey on ICT Usage in Households and by Individuals;
EU Community Survey on ICT Usage and e-Commerce in Enterprises;
Job Vacancy Statistics (JVS);
Adult Education Survey (AES);
Continuing Vocational Training Survey (CVTS);
Statistics on Research and Development (RS).

14. Experimental measures of skills mismatch

15. Skills mismatch - the context
In the absence of commonly agreed indicators to measure skills mismatch within the European Statistical System (ESS), Eurostat proposes two experimental indicators to foster policy debate on the issue. Both the indicators rely on EU Labour Force Survey (EU-LFS) data. To guarantee the quality of results, data have been developed, produced and disseminated on the basis of uniform standards and of harmonised methods (making use of ISCED, ISCED-F, ISCO and NACE classifications).

16. Skills mismatch - the indicators
Eurostat proposes experimental indicators measuring the "vertical" and "horizontal" skills mismatch. "Vertical" measures focus on discrepancies between educational attainment levels (ISCED digit) and occupations (ISCO digit) by sector (NACE Rev.2) "Horizontal" measures focus on misalignments between the educational field of the highest level of education attained (ISCED-1999&2013 fields of education and training) and occupations (ISCO digit).

17. Vertical skills mismatch
Over-qualification rate (by sector) The over-qualification rate is calculated by means of the number of tertiary graduated persons in employment (ISCED 2011 level 5 to 8) whose occupations are assumed not to require tertiary education (ISCO 2008 major groups 4 to 9).

18. Vertical skills mismatch (cont'd)
Over-qualification figures are useful for labour market analyses, on the basis that a company trying hard to fill a post will scale down its requirements in terms of qualifications. The converse also applies: a company that is having no difficulties in filling a post will raise the level of qualification required.
Therefore, over-qualification can signal an excess of labour supply from workers with high qualifications — or, conversely, labour demand shortages.
N.B. focus on the 8 biggest sectors (due to data confidentiality / reliability)

20. Horizontal skills mismatch
Horizontal skills mismatch by field of education The horizontal skills mismatch rate by field of education is calculated by matching broad fields of education and training (ISCED-F fields of education and training) to occupations at ISCO digit level.

21. Horizontal skills mismatch (cont'd)
Skills mismatch by field of education may be relevant for labour market analyses. Non-matched individuals could face frustration for not seeing a direct return to the effort dedicated to study and high shares of non-matched persons in employment may also generate economic losses for enterprises because of decreased efficiency and/or additional costs necessary to acquire specific skills on the job. N.B. focus on people less than 34 years old – field of education of the latest educational attainment level available only if obtained within the last 15 years.

23. Planned improvements

24. Improved HATFIELD Currently
HATFIELD is collected at ISCED-F 2013 broad fields (11 broad fields) and restricted to ISCED 3-8 and age (35+ only if HATYEAR is less than 15 years ago)
In the future
HATFIELD should be transmitted for ISCED-F narrow fields, ISCED 3-8 but no age restriction (i.e. 15+), to allow more skills mismatch analyses.

25. New variable HATWORK Definition
The variable refers to work experiences that were part of the curriculum of the formal programme that led to the highest level of education successfully completed.
Purpose
The variable links education systems with the labour market. Policy emphasise is on work-based learning as this ensures that education systems are appropriate to train people for the labour market. The categories for this variable allow an insight which type of work-based learning is most relevant and help to design education programmes accordingly in the best way.

26. 2022 EU-LFS ad-hoc module
Following the DSS decision of October 2017, the LFS 2022 ad-hoc module will be on job skills.
In order to start development work, DG ESTAT (Unit F3) has organised with DG EMPL an inter-agency workshop that took place in Brussels on 16 November.
The inter-agency workshop has been intended to discuss statistical approaches for measuring adult skills mismatch and skills requirements on the job.