project documents Identification and anticipation of skill requirements Instruments used by international institutions and developed countries Gerla van Breugel Project Documents Identification and anticipation of skill requirements Instruments used by international institutions and developed countries Gerla van Breugel Economic Commission for Latin America and the Caribbean (ECLAC) This document has been prepared by Gerla van Breugel, consultant with the Employment Studies Unit of the Division of Economic Development of the Economic Commission for Latin America and the Caribbean (ECLAC), in the framework of the cooperation programme between the Embassy of Norway and ECLAC under the project entitled “Vocational education and training for equality in Latin America and the Caribbean”. The views expressed in this document, which has been reproduced without formal editing, are those of the authors and do not necessarily reflect the views of the Organization. United Nations publication LC/TS.2017/85 Distribution: Limited Copyright © United Nations, October 2017. All rights reserved Printed at United Nations, Santiago S.17- 00483 Applications for authorization to reproduce this work in whole or in part should be sent to the Economic Commission for Latin America and the Caribbean (ECLAC), Publications and Web Services Division, [email protected]. Member States and their governmental institutions may reproduce this work without prior authorization, but are requested to mention the source and to inform ECLAC of such reproduction. ECLAC Identification and anticipation of skill requirements... Contents Abstract ............................................................................................................................................ 7 Executive summary ......................................................................................................................... 9 Resumen ejecutivo ........................................................................................................................ 19 Introduction .................................................................................................................................... 31 I. Skills identification and anticipation exercises: an overview of approaches and characteristics ......................................................................................... 33 A. Definition of skills............................................................................................................ 33 B. Definition of skills identification exercises vs. skills anticipation exercises .................... 34 C. Measurement of skills .................................................................................................... 35 D. Research questions ....................................................................................................... 35 E. Methods and data sources ............................................................................................. 37 1. Qualitative approaches & sources .......................................................................... 37 2. Quantitative approaches & sources ....................................................................... 40 F. Time horizon and frequency ........................................................................................... 47 G. Scope and coverage ...................................................................................................... 48 1. Occupational level .................................................................................................. 49 2. Educational level .................................................................................................... 50 3. National or regional level ........................................................................................ 51 4. Sectoral level .......................................................................................................... 53 II. Stakeholders involved in the identification and anticipation of skills requirements ............... 55 A. Stakeholder involvement in development of skills exercises ......................................... 55 1. The importance of different stakeholders ............................................................... 55 2. Types of governance models ................................................................................. 56 B. Stakeholder involvement in discussing results and developing policy response ........... 57 1. Sources of stakeholder conflicts ............................................................................. 59 2. Consensus building / conflict reducing mechanisms .............................................. 59 III. Case studies .......................................................................................................................... 61 A. A pan-European approach: the Cedefop model ............................................................ 61 1. Description .............................................................................................................. 61 2. Strengths, weaknesses and recent developments ................................................. 64 B. Canadian Occupational Projection System (COPS) ...................................................... 65 3 ECLAC Identification and anticipation of skill requirements... 1. Occupational demand ............................................................................................. 66 2. Occupational supply ............................................................................................... 67 3. Imbalances ............................................................................................................. 68 C. BLS Occupational Labour Demand Estimation Methodology – United States .............. 68 1. Forecasting occupational demand ......................................................................... 69 2. Education and training requirements ...................................................................... 70 3. Limitations .............................................................................................................. 71 D. A holistic approach - UKCES (UK) ................................................................................. 71 1. Skills identification: employer surveys .................................................................... 72 2. Skills anticipation: working futures and the future of work study ............................ 73 E. The French model .......................................................................................................... 76 1. Macro-level exercises – Prospective des métiers et de qualifications (PMQ) (Occupations and skills outlook) ............................................................................. 76 2. Meso-level exercises – Regional Observatories .................................................... 77 3. Micro-level exercises .............................................................................................. 78 F. Other approaches by international organizations .......................................................... 78 1. World Bank – Skills Toward Employment and Productivity .................................... 78 2. International Labour Organization and European Union-Skills for Green Jobs ..... 80 3. OECD – Skills Strategy framework ........................................................................ 81 IV. Use and dissemination of skills information ........................................................................... 83 A. Employment policies ...................................................................................................... 83 B. Education and training policies ...................................................................................... 85 C. Migration policies ............................................................................................................ 86 D. Development policies ..................................................................................................... 87 1. Transition to a greener economy ............................................................................ 87 2. Transition to a digital economy ............................................................................... 88 E. Social policies ................................................................................................................. 88 F. Dissemination of skills information ................................................................................. 89 1. Reports ................................................................................................................... 89 2. (Searchable) Data .................................................................................................. 90 3. Occupational data bases ........................................................................................ 91 4. Workshop, seminars and conferences ................................................................... 91 V. Choosing and developing a suitable approach to skill identification and anticipation exercises: some aspects to consider .......................................................... 93 A. Research objectives ....................................................................................................... 93 B. Characteristics of methods and sources ........................................................................ 94 C. Stakeholder involvement ................................................................................................ 96 D. Resource availability ...................................................................................................... 96 Bibliography ................................................................................................................................... 99 Annexes ....................................................................................................................................... 103 Annex 1 ................................................................................................................................ 104 Annex 2 ................................................................................................................................ 105 Annex 3 ................................................................................................................................ 108 4 ECLAC Identification and anticipation of skill requirements... Tables Table 1 Mapping of ISCO-08 major groups to skill levels ................................................. 49 Table 2 National and regional levels covered in skills identification and anticipation exercises.................................................................................... 52 Table 3 National and sectoral levels covered in skills identification and anticipation exercises.................................................................................... 53 Figures Figure 1 Stakeholder involvement in the development of skills exercises ................................................................................................. 56 Figure 2 Ministerial stakeholder involvement in discussing results from skills exercises and/or in developing a policy response ................................................................................................. 58 Figure 3 Non-ministerial stakeholder involvement in discussing results from skills exercises and in developing a policy response ..................... 58 Figure 4 Use of skills identification and anticipation exercises for employment policy .......................................................................................... 84 Figure 5 Use of skills identification and anticipation exercises for education policy .............................................................................................. 85 Diagrams Diagram 1 Overview of the Manpower Requirements Approach (MRA) ............................... 44 Diagram 2 Levels of analysis in skills research ..................................................................... 48 Diagram 3 Aspects influencing a suitable approach to skills identification and anticipation exercises ................................................. 98 Diagram A.1 Overview of Cedefop model of demand for and supply of skills ............................................................................................. 104 Diagram A.2 The Working Futures Models and Modules - UK ............................................... 106 Diagram A.3 Analytical process of Future of Work foresight study – UK ............................... 107 Diagram A.4 Overview of elements of PMQ macro projections - France ............................... 108 5 ECLAC Identification and anticipation of skill requirements... Abstract Responding to the current skills situation or anticipating on the future skills situation is only feasible when reliable and accurate skills information is available when needed. Various quantitative and qualitative methods are available, and each of these is capable of serving certain research objectives, such as the type of skills and how many individuals with these skills are needed, now or in the future. These methods also require certain stakeholder involvement of for example ministries, social partners, education providers, local governments, public employment offices, and sector skills councils. Lastly, these methods require a determined combination of resources such as data, human resources and financial resources. Various methods generate data that are used as input in other methods, some examples of the methods and sources discussed are input-output models, computable general equilibrium models, manpower requirement approach, informed opinion and specialist knowledge, employer surveys, labour force surveys and scenario development. Selecting and developing a suitable approach to skills identification and anticipation exercises involves a trade-off process in which the various aspects have to be weighed against each other. However, based on past experience, a mixed method approach, i.e. using a combination of various quantitative and qualitative approaches, generates the most reliable results. In most cases the need for skills is not projected directly, however via occupational demand. When these results are combined with detailed descriptions of occupations including skills information and educational attainment information (education type, level, field of study), the need for skills can be determined and can also be linked to what Vocational Education and Training program is required. Information on skills needs can be used as input for a wide variety of policy fields such as employment, education and training, migration, social and other development issues. 7 ECLAC Identification and anticipation of skill requirements... Executive summary The effectiveness and efficiency of a national vocational education and training (VET) system depends, amongst others, on whether it provides its learners with the required skills now and in the future. These requirements have changed over the last decades and they are expected to change again in the future. National VET systems need to adapt to these changes in time to avoid costly skill mismatches as not having the right skills means lower wages and lower job satisfaction for workers, lower productivity and more hiring costs for employers, and lower economic output for the economy as a whole. Skill mismatches are omnipresent in developed countries: on average 45% of workers in 27 EU countries reported being under- or over-skilled in 2010. Skill mismatches can be reduced by certain policies, however these depend heavily on information about current and future demand for and supply of skills and corresponding mismatches. Therefore, this report gives an overview of the current mechanisms used by international institutions and developed countries to identify and anticipate the skills requirements of firms, and furthermore it shows how this information is then used for policy development and communication. Special attention is given to the identification and anticipation of skills of individuals with a Vocational Education and Training (VET) background, either at secondary or tertiary level. I. Skills identification and anticipation exercises: an overview of approaches and characteristics In this report skills are broadly defined as individual characteristics that drive at least one dimension of individual well-being and social-economic progress, that can be measured meaningfully, and that are malleable through environmental changes and investments. Skills can be classified as generic versus job specific skills, or as cognitive versus social and emotional skills. Furthermore, skills identification refers to the assessment of current skill levels and needs, while skills anticipation refers to any exercise that tries to predict future skill levels and needs. Instead of measuring skills directly, like in the UK, Canada and Austria, most countries use proxies due to disagreement about skills definitions between the educational sector and the labour market, the huge number of possible skills to be measured, and the time and costs involved. Frequently used proxies for skills are occupations, fields of study, qualification levels and qualification types. Skills exercises mainly focus on answering three categories of research questions: 1) how many jobs will exist now and in the future, 2) what 9
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