Methodology

The graphic below gives a broad overview of the conceptual framework, along with the different measurement approaches.

Skills can be measured by focusing on 5 different dimensions:

• skills supply: This refers to skills which people possess. It measures their level of skills and how this changes over time;
• skills demand: This refers to skills needed by employers. It measures the level of skills needed in the economy and how this changes over time;
• skills utilisation: This refers to the extent to which different types of skills, for example digital, computational, physical, communicational, etc., are applied in someone’s job;
• skills development: This refers to skills developed through participation in education and training activities, for example enrolment or participation in on-the- job trainings;
• skills mismatch: This measures the gap between the demand and supply of skills as well as conditions of workers, jobs, or vacancies. It can be defined in the following ways:
  • vertical mismatch: mismatches between workers' education level and their occupation. This means mismatches between their formal education and the job requirements.
  • horizontal mismatch: mismatch between workers' fields of education and their occupation. This means people working outside their field of education.

Both type of mismatches can be measured in an objective way by comparing people’s level and field of education to their occupation, or in a subjective way by asking people how they perceive the adequacy of their level and field of education in comparison to their job requirements.

3 different approaches have been identified:

• indirect measures: These are proxies of a certain level of skills. For instance, skills acquired through formal education or skills needed for employment in a certain profession, measured by using data on qualifications and occupations; 
• direct measures: These are direct assessments of skills, for example through test scores for skills supply or use of data on newly employed and job vacancies for the demand side.
• self-reported measures: These refer to people’s self-assessment of their own skills, such as subjective level of digital skills, their reported use of skills at work, and the skills that employers indicate as needed.

Formal qualifications are used as proxy measurement to obtain details about the skills that are available in the labour market or in the population in general. They provide a wide range of information about people's qualifications. For example, according to this approach high-skilled people are those holding a university diploma.

The available indirect measures of skills supply are:

• data on level, field, and orientation of educational attainment from the EU labour force survey (EU-LFS)
• data on graduates by field and level of education from the UNESCO-OECD-EUROSTAT joint data collection.

Data on direct measures of skills supply are obtained by using direct assessments of specific skills, for example by using test scores.

Test scores generally assess a limited set of skills. Nevertheless, it is expected that these direct measures reflect people's level of skills in a better way than indirect measures, which assume that people acquire a certain degree of skills through formal qualifications.

The direct measurement of skills is carried out by the Organisation for Economic Co-operation and Development (OECD) in the frame of the following studies:

• programme for the international assessment of adult competencies (PIAAC)
• programme for international student assessment (PISA)

Additionally, International Association for the Evaluation of Educational Achievement (IEA) is carrying out:

• trends in international mathematics and science study (TIMSS)
• progress in international reading literacy study (PIRLS).

Currently, direct measures of skills supply are not available within the European Statistical System (ESS).

Eurostat provides several indicators on the level of specific skills, measured by self-evaluation. This applies particularly to the following:

• level of digital skills, measured as part of the Survey on ICT usage in households and by individuals
• level of foreign languages skills, measured as part of the adult education survey and by the EU-LFS module on the labour market situation of migrants and their immediate descendants.

Indirect measures of skills demand refer mainly to data about:

• occupation by educational attainment
• various measures of employment, such as temporary employment, reasons for part-time employment, quality of labour indicators and youth employment
• employment by economic sector, including data on ICT specialists in employment
• R&D personnel
• employment in science and technology.

The available indirect measures of skills demand are:

• employment by educational attainment (by level, orientation, and field of education), by occupation, and by economic sector from the EU labour force survey
• unemployment by educational attainment (by level, orientation, and field of education), by occupation, and economic sector of the last job from the EU labour force survey
• employment of researchers from the statistics on Research and Development
• employment in high-tech sectors from the EU labour force survey
• human resources in science and technology covering stocks, job-to-job mobility, and education inflows from the EU Labour Force Survey and UNESCO-OECD-EUROSTAT joint data collection.

The most direct measures of skills demand are data on job vacancies and newly employed people. The latter one refers to the share of people employed for 12 months or less in their current job. Both indicate business' direct demand for skills.

A less direct approach is looking at the topics or subjects of training courses provided by enterprises, for example IT or foreign language skills.

Eurostat provides data on

• job vacancies by economic sector from the job vacancy statistics
• newly employed from the EU labour force survey
• skills covered by continuing vocational training courses from the continuing vocational training survey.

The demand for skills can be assessed by surveying enterprises about the skills and competences they anticipate as most important in the upcoming years. Additionally, self-reported measures can offer insights into businesses that recruit or try to recruit ICT specialists.

Eurostat provides information on the

• skills needed for the development of the enterprise from the continuing vocational training survey
• demand of digital skills from the survey on ICT usage and e-Commerce in enterprises.