Skills mismatch, productivity and policies: Evidence from the second wave of PIAAC

Müge Adalet McGowan; Dan Andrews

doi:https://doi.org/10.1787/65dab7c6-en

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

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Skills mismatch, productivity and policies

Evidence from the second wave of PIAAC

This paper extends earlier OECD work exploring the link between skills mismatch, productivity and policies to include the countries in the second wave of OECD Survey of Adult Skills, with a special focus on New Zealand. We find that the percentage of workers who are mismatched in terms of skills is 28% in New Zealand, slightly over the OECD average of 25%. The share of over-skilling is at the OECD average of 18%, while the share of under-skilling - at around 10% - is also above the OECD average of 7%. The results suggest that improving the allocation of skills to OECD best practice could be associated with an increase in productivity of around 7% in New Zealand.

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Keywords: reallocation, framework policies, education, human capital, labour mobility, productivity, skill mismatch

JEL: O40: Economic Development, Innovation, Technological Change, and Growth / Economic Growth and Aggregate Productivity / Economic Growth and Aggregate Productivity: General; J61: Labor and Demographic Economics / Mobility, Unemployment, Vacancies, and Immigrant Workers / Geographic Labor Mobility; Immigrant Workers; J20: Labor and Demographic Economics / Demand and Supply of Labor / Demand and Supply of Labor: General; J24: Labor and Demographic Economics / Demand and Supply of Labor / Human Capital; Skills; Occupational Choice; Labor Productivity; I20: Health, Education, and Welfare / Education and Research Institutions / Education and Research Institutions: General

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