Measuring labour mismatch in Europe

Abstract

We calculate aggregate and comparable measures of mismatch in the labour market for 30 European countries. These indicators measure vertical mismatch (related to the level of education, e.g. overeducation, and undereducation) and horizontal mismatch (related to the field of education) and are comparable across countries and through time. In European countries, between 15 % to nearly 35 % of workers have a job for which they have more (or less) qualifications than the usual level. Approximately 20 % to nearly 50 % work in a job for which they do not have the usual field qualification. There is a great variability on mismatch across European labour markets. Undereducation affects more workers than overeducation in most European countries. Low correlations between mismatch and unemployment indicate that mismatch should be regarded as an additional informative variable, thus useful to characterize labour markets.