1. Institute for Employment Research 1 1 May 2008 dgdg CEDEFOP Thessaloniki, 30th May 2008 Dr. Ulrich Walwei Vice-Director und Professor Skill shortages and long-term unemployment at the same time: A challenge for research

2. Institute for Employment Research 2 2 Skill shortages and long-term unemployment at the same time: A challenge for research  Mismatch in Germany  Some stylized facts  Longer-term considerations  Research topics  Measuring the skill level  Matching problems and the role of skills  Analysing the search process  Occupational flexibility and mobility

3. Institute for Employment Research 3 3 Mismatch in Germany: Some stylized facts

4. Institute for Employment Research 4 4 Source: IAB in 2005 Unemployed by skill level 1975-2005 GermanyWestern Germany 11,8% total 26,0% unskilled Eastern Germany and Berlin Western Germany 9,7% apprentices * * (incl. graduates from technical colleges) 4,1% university graduates

5. Institute for Employment Research 5 5 Source: IAB Employment rates by skills of the 30-to-64-year-olds - as a percentage of the corresponding labour force - University graduates Apprentices (incl. graduates from technical colleges) Unskilled

6. Institute for Employment Research 6 6 Source: IAB-Vacancy-Survey and BA-Statistics Relation between unemployed and vacancies 1994-2007 - final quarter each -

7. Institute for Employment Research 7 7 Mismatch in Germany: Longer-term considerations

8. Institute for Employment Research 8 8 Labour supply and labour demand in Germany 1991-2025 - million persons - Source: IAB Labour supply (incl. hidden labour force) Labour demand Assumptions: Net migration of 200.000 per year, increasing labour force participation rates of women and the elderly

9. Institute for Employment Research 9 9 Skill level of young cohorts entering the labour market – Western Germany 1980-2004, per cent - Source: IAB University graduates Graduates from post- secondary technical colleges Unskilled Upper secondary school examination and apprenticeship Upper secondary school examination Apprenticeship 2004

10. Institute for Employment Research 10 Source: IAB Children below 15 years University graduates Pupils and students Apprentices (incl. technical colleges) Unskilled 5-14 years15-24 years25-34 years35-44 years45-54 years55-64 years Population by skills and age in 2005 - million persons -

11. Institute for Employment Research 11 Apprentices (incl. technical colleges) Unskilled University graduates Source: IAB Development of labour force by skill levels 1991-2004

12. Institute for Employment Research 12 Research topics I : Measuring the skill level

13. Institute for Employment Research 13  We need to define what we mean by using the term „skill“  Skills do not only include formal elements but also informal elements  We do have to develop new concepts of measuring skills  A new research project at the IAB Research topics I : Measuring the skill level

14. Institute for Employment Research 14 Research questions  Relationship between diploma (formal qualification), cognitive competencies and employment careers Formal qualification Labour market situation Cognitive competencies Time

15. Institute for Employment Research 15  Only few empirical analyses deal with the role of cognitive competencies of adults in Germany  In particular: No longitudinal studies which measure cognitive competencies of adults  No studies which combine the longitudinal perspective with the measurement of cognitive competencies What do we know from previous research?

16. Institute for Employment Research 16 Example I: Literacy What is the maximum number of days you should take this medicine? List three situations for which you should consult a doctor.

17. Institute for Employment Research 17 Example II: Numeracy The design calls for 5 large potted plants to be placed along the south edge of the patio, one in each corner (as shown) and 3 in between. How far apart should the centers of the pots be if you want them to be equally spaced? What is the area of the actual square flower bed in the middle of the patio? (Note: you can use the scale on the bottom).

18. Institute for Employment Research 18 Research topics II : Matching problems and the role of skills

19. Institute for Employment Research 19  Reasons for shortages of labour as well as jobs  In this context we have to identify the role of skills Research topics II : Matching problems and the role of skills

20. Institute for Employment Research 20 Source: IAB Duration of search and recruitment in Germany - final quarter each, days - Duration of search Duration of scheduled recruitment Duration of recruitment

21. Institute for Employment Research 21 Duration of search Duration of scheduled recruitment Duration of recruitment Source: IAB Duration of search and recruitment in Germany for jobs requiring a university degree - final quarter each, days -

22. Institute for Employment Research 22 XXX Source: IAB Obstacles for production in Germany - 1993 - 2007, per cent - Firms with obstacles for production * related to all firms Lack of orders* Shortage of workers* 60% 50% 40% 10% 30% 20%

23. Institute for Employment Research 23 Research topics III : Analysing the search process

24. Institute for Employment Research 24  What do both sides expect from each other?  What can facilitate a proper match? Research topics III : Analysing the search process

25. Institute for Employment Research 25 Preparedness of UB-II-recipients to accept certain working conditions - Percent - Source: Survey “Lebenssituation und Soziale Sicherung“ (2005/06) Yes No For a new job UB-II-recipients would accept … …occupational mobility …work below their competences …more demanding work …longer distance to work place …less interesting work …less favourable working time …less favourable working conditions (noise, dirt) …lower income …removal

26. Institute for Employment Research 26 The view of the firm: Acceptance of lower wages by applicants Source: IAB IncreasedDecreased Difference

27. Institute for Employment Research 27 The view of the firm: Acceptance of unfavourable working conditions by applicants Source: IAB IncreasedDecreased Difference

28. Institute for Employment Research 28 Research topics IV : Occupational flexibility and mobility

29. Institute for Employment Research 29  Flows and dynamics need to be analysed more deeply  One option: Occupational research based on longitudinal data Research topics IV : Occupational flexibility and mobility

30. Institute for Employment Research 30 Occupational changes of workers after their apprenticeship - per cent - Men Women Apprentices graduated in … Source: IAB Shares 30% 25% 20% 15% 10%

31. Institute for Employment Research 31 Occupational changes of workers after their apprenticeship - depending on different circumstances - per cent - Non-recruitment of firm which provided training followed by an unemployment spell Non-recruitment of firm which provided training and subsequent employment elsewhere Recruitment of firm which provided training Non-recruitment of firm which provided training and subsequent employment elsewhere Recruitment of firm which provided training Source: IAB Men Women Apprentices graduated in …

32. Institute for Employment Research 32 dgdg For further information: www.iab.de dgdg 31. st May 2008