THE IM(PERFECT) MATCH ILO INTERNATIONAL CONFERENCE REGIONAL VIEW: - PowerPoint PPT Presentation

THE IM(PERFECT) MATCH – ILO INTERNATIONAL CONFERENCE REGIONAL VIEW: ARAB STATES AND CENTRAL ASIA Patrick Daru (ILO) and Eduarda Castel-Branco (ETF) Geneva, 11/05/2017

DO SKILLS MATTER IN THE MENA REGION? 2

THE SKILLS MISMATCH STORY IN THE ARAB STATES USUAL STORYLINE IN FACT Lack of datasets to analyze skills mismatch Short term training Sticky wages that do Education and Unfilled vacancies programme to skills programmes not allow market to in context of compensate for not aligned with unemployment the failures of reach equilibrium the market education system Segmented markets: migrants as a cheaper option

SKILLS MISMATCH NOT ALWAYS A PRIORITY FOR EMPLOYERS Percentage of Firms Yemen 24.4 Identifying Inadequately Morocco 30.9 Educated Workforce Lebanon 15.3 as a Major Constraint Jordan 9.5 in selected MENA Countries (%) Iraq 34.2 Egypt 50.1 Algeria 36.8 Based on: Enterprise Surveys MENA 18.0 Average ( http://www.enterprisesurveys.org ), The World World 24.5 Average Bank 0.0 20.0 40.0 60.0 Latest surveys available, 2015

ON THE EMPLOYERS’ SIDE Employers Skills are not Short term Lack of complain about adequately business vision organization of skills mismatch valued employers • Benefit from labour (not always), and surplus in a context • Wage differentials • Impact capacity to of low skilled labour do not train between most and structure voice on intensive production; least educated are skills required • 16% Arab Firms • Longer term the lowest in the • does not prevent the train new hires investment in world possible poaching against 36% globally business and skills by competitors (WB Enterprise difficult in the Survey) context of fragility

QUALIFICATION MISMATCH IS HIGH Total % Latest % Over- % Under- qualificati Country Year Source qualified qualified on Available mismatch 53.18 Bahrain 2004 Labour Force Survey 13.15 40.03 Employment and Unemployment 23.1 Jordan 2013 10.6 12.5 Survey 48.6 Morocco 2012 National Employment Survey 7.7 40.9 oPt 2012 School to Work Transition Survey 13.5 46.4 59.9 52.19 Qatar 2012 Labour Force Survey 14.1 38.09 Saudi 48.13 2013 Labour Force Survey 24.29 23.84 Arabia 83 Yemen 2013-2014 Labour Force Survey 3.35 76.12

YOUNG WORKERS PERCEPTION OF SKILLS MISMATCH Egypt Jordan 4.1% 8.2% 12.4% Adequate Education and Skills 1.2% Adequate Education and Skills Over qualified 52.2% Over qualified 34.2% Under qualified Under qualified 87.6% Don't Know ILO: School to Work Transition Survey, 2012

FROM WORKERS / JOB SEEKERS PERSPECTIVE WASTA – HIGHER ON LIST OF JOB “We take on education SEEKERS ISSUES (NOT OF we did not choose, that WORKERS) do not match the market WHAT SIGNALS? IN A CONTEXT OF demand, and for jobs LACK OF TRUSTED CERTIFICATES we will not get because of Wasta ”. INFORMATION ASYMMETRIES – AND CAREER GUIDANCE LACK OF CHOICE > INADEQUATE BEHAVIOR / SOFT SKILLS UNICEF Youth Consultation in Jordan, April 2017

JORDAN: REFUGEE CRISIS RESPONSE SKILLS AS ONE ELEMENT ONLY OF JOB MISMATCH “Replacement” From Feb. 2016: “Refugees take of migrants by Access of jobs” to Syrian refugees Syrian Refugee “Refugees do requires a new to Jordan not want to business Labour Market work” model.

EASTERN EUROPE AND CENTRAL ASIA 10

1.SKILL MISMATCH ETF Position Paper (2012) adopted the following definition of skill mismatch : “… a broad term that encompasses various types of skill gaps and imbalances such as over-education, under-education, over-qualification, under-qualification, over-skilling, skill shortages and surpluses, skills obsolescence and so forth. Hence skill mismatch can be both qualitative and quantitative, thus referring to both situations where a person does not meet the job requirements and where there is a shortage or surplus of persons with a specific skill. Skills mismatch can be identified at the various levels: of the individual, the enterprise, the sector or the economy. Several different types of skill mismatch can coincide” . 11

1.2 SKILL MISMATCH MEASUREMENT IN ETF WORK Explored in … Methodology Measures what Strengths/Weaknesse s Variance relative rates Dispersion skills. Macro. Data avail. MOLD, KAZ, KYR, (ER, UR) Magnitude. Coefficient of variation Dispersion skills. Macro. Data avail. Magnitude Proportion of Direction mismatch: Macro. Data avail GEORGIA. unemployed vs employed which educ levels in MOLD, KAZ, KYR, shortage / excess Unemployed pop – not Mismatch by occupation Ratio employed MOLD occup/educ: over-, considered. Data avail under-qualificatio Other measures used in ETF analysis: Beveridge curve, relative 12 wages by educational levels

EASTERN EUROPE ARMENIA AZERBAIJAN BELARUS GEORGIA MOLDOVA UKRAINE SOME FIGURES INCLUDE RUSSIAN FEDERATION 13

2. EDUCATIONAL ATTAINMENT POPULATION (2015) Armenia (15-75) Azerbaijan (15-64)-2013 high high 22% 23% low low mediu 13% mediu 8% m m 65% 69% Ukraine (15-70) Georgia (25-64) high high 35% 44% medium 49% mediu m 61% low low 7% 4% 14 Sources: DB Torino process 2016

EE: YOUTH UNEMPLOYMENT RATE AND PARTICIPATION IN VET (UPPER-SECONDARY LEVEL) Youth unemployment rate (15-24) and % VET students in upper sec education - 2014 60 50 40 30 40 20 AM 10 0 Armenia Azerbaijan Georgia Republic of Russian Ukraine GE 30 Moldova Federation VET stud % upper sec Youth UR (15-24) UA 20 RU AZ 10 MD 10 20 30 40 50 15 % of VET students in upper secondary education

EE: A) UNEMPLOYMENT RATE (+15; 15-24) – 2010, 2015 B) NEET RATE (15-24) – 2013, 2015 Unemployment rate by sex (age group +15) and NEETs Rates (15-24) by sex (%) - 2013 and 2015 youth unemployment rates (15-24) , % 45 40 45 38.9 35 36.4 40 32.5 30 35 30.8 25 30 22.4 20 25 15 17.4 20 14.9 13.4 14.9 10 12.8 15 5 10 0 Total Male Female Total Male Female Total Male Female Total Male Female 5 0 2010 2015 2010 2015 2010 2015 2010 2015 2011 2015 2010 2015 Armenia Georgia Republic of Ukraine Armenia Azerbaijan Belarus Georgia Moldova Ukraine Moldova 2015 Total Male Female Youth UR 2013 16

EE: SKILL GAPS (2013) Skill gap (2013) % firms identifying 35 and inadequately 30 educated Workforce as a major constraint 25 20 15 10 5 0 AM AZ BY GE MD RU UA 2013 6.4 0.5 17.9 9.9 31.2 7.5 Based: World Bank Enterprise Surveys 17

EE SKILL MISMATCH: OVER-QUALIFICATION YOUTH 100% 90% 80% 70% 65.9 66.9 67.9 60% 50% 40% 6.6 30% 8.9 11.6 20% 27.5 23.2 21.5 10% 0% Armenia Moldova Ukraine Overqualification Underqualification Matched qualification Source: ILO SWTS 2012-2013 18

EE SKILL MISMATCH: VARIANCE UR AND ER - MOLDOVA Variance relative unemployment rates - Variance relative employment rates - Mold Mold 0.35 0.10 0.30 0.25 0.08 0.20 0.06 0.15 0.04 0.10 0.02 0.05 0.00 0.00 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 Total Men Women Total Men Women Variance relative employment and unemployment rates (F+M) - Moldova 0.30 0.20 0.10 0.00 2010 2011 2012 2013 2014 2015 19 E/Ei (empl) U/Ui (unem)

MOLDOVA: PROPORTION OF UNEMPLOYED VS EMPLOYED BY EDUCATIONAL LEVEL Proportional mismatch - Moldova  Excess supply of low 1.60 skilled labour 1.40  Persisting shortage 1.20 highly educated but 1.00 matched in last 2 0.80 years  Medium level 0.60 qualifications (VET): 0.40 matched; trend 0.20 towards shortage 0.00 2010 2011 2012 2013 2014 2015 Low Medium High Levels education - LOW: ISCED 0-2; MED: ISCED 3-4; HIGH: ISCED 5-8 20

MOLDOVA: OCCUPATIONAL MISMATCH (ISCO) Mismatch by occupation of employed population - trend (Moldova) 1.00 0.90 0.80 0.70 0.60 2010 0.50 2011 0.40 2012 0.30 2013 2014 0.20 2015 0.10 0.00 Overqualific Overqualificat Matched qualif Matched qualif Underqualif (HE) (second level) (HE) (second lev) Levels education - LOW: ISCED 0-2; MED: ISCED 3-4; HIGH: ISCED 5-8 21

GEORGIA: PROPORTION OF UNEMPLOYED VS EMPLOYED BY EDUCATIONAL LEVEL Proportional mismatch - (Men) - Georgia 1.4 1.2 1 0.8 0.6 Proportional mismatch (Women) - Georgia 0.4 1.8 1.6 0.2 1.4 0 1.2 2009 2010 2011 2012 2013 2014 2015 1 Primary & less Basic Medium High 0.8 0.6 0.4 0.2 0 2009 2010 2011 2012 2013 2014 2015 Primary & less Basic Medium High 22

CENTRAL ASIA KAZAKHSTAN KYRGYZSTAN TAJIKISTAN TURKMENISTAN UZBEKISTAN 23 Sources: World Bank

CENTRAL ASIA: EDUCATIONAL ATTAINMENT (25-64) Educational attainment adult population (25-64), % 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2010 2015 2010 2015 2009 Kazakhstan Kyrgyzstan Tajikistan Low Medium High 24

CENTRAL ASIA: A) EMPLOYMENT RATES BY SEX (20-64); B) UNEMPLOYMENT RATES (+15) AND YOUTH UR (15-24) Employment rate by sex (20-64) - 2009 and 2015 100 Unemployment rates by sex (15 +) and youth 80 unemployment rates (15-24), % 18 60 16 14 40 12 10 20 8 6 0 2010 2015 2010 2015 2009 4 Kazakhstan Kyrgyzstan Tajikistan 2 0 Total Male Female 2010 2015 2010 2015 2009 Kazakhstan Kyrgyzstan Tajikistan Total Male Female Youth 25