THE SYSTEM LEVEL CAUSES
AND CONSEQUENCES OF
FIELD OF STUDY MISMATCH
Guillermo Montt
Directorate for Employment, Labour and Social Affairs
guillermo.montt@oecd.org
ELS Seminar
June 2015
What is field-of-study mismatch?
• Theory: workers trained in a
field but working in another,
unrelated sector
E.g.
• a pharmaceutical
technician (ISCO 321) is
matched if studied
science or health
• a ship and aircraft
controller and technician
(ISCO 325) if studied
engineering only
“English Lit – How about you?”
• Operational definition
Eight fields of study:
1) General programmes
2) Teaching and education
Humanities,
In3)PIAAC,
if anlanguages,
individualarts
4) Social sciences, business, law
works
in an occupation that
5) Science, mathematics,
does
not correspond to its
computing
field
of study, the
worker is
6) Engineering,
construction,
manufacturing
considered
mismatched by
7) Agriculture
field
of study and veterinary
8) Health and welfare
9) Services
Each ISCO_08 3-digit
occupations matched to
each field (one or more)
Why should we care about studying fieldof-study mismatch?
• Existing evidence:
– For workers it brings lower wages, lower job
satisfaction, higher on-the-job search
– More likely in certain fields than others
(humanities, languages and arts vs. health and
welfare)
• Gaps in the literature:
• Updated cross-national levels and effects of FoS
mismatch on individual outcomes
• Relationship to other forms of mismatch
• Relationship to labour market dynamics
• System-level costs of FoS mismatch
Should we care and/or do anything about field of study
mismatch?
Data and methods
• PIAAC Survey of Adult Skills, 2012
• Data for 24 countries
• Cross-country and pooled-sample analysis
– Pooled analysis rescales weights to consider
each country as a unit
• All analyses (OLS, logit, path analysis) consider
replicate weights and plausible values (where
applicable)
Source: Survey of Adult Skills (PIAAC) (2012).
Finland
Germany
Austria
Norway
Sweden
Netherlands
Denmark
Estonia
Canada
Slovak Republic
Czech Republic
Country Average
Flanders (Belgium)
Poland
Ireland
Russian Federation
France
Spain
United States
60%
Japan
Australia
Italy
England/N. Ireland (UK)
Korea
How much field-of-study mismatch is
there?
Percentage of workers mismatched by field-of-study
50%
40%
30%
20%
10%
0%
How much field-of-study mismatch is
there?
For a given group of
graduates by field
For a given group of workers
by occupation
(2) Teacher training and education
science
(3) Humanities, languages and arts
(4) Social sciences, business and
law
(5) Science, mathematics and
computing
More than
(6) Engineering, manufacturing
and 40% of workers in the
construction
services sector come from other
>70% of graduates from (7) Agriculture andfields.
veterinary
humanities, languages and
(8) Health and welfare
arts end up working in
another sector
(9) Service
100% 80% 60% 40% 20% 0%
0% 20% 40% 60% 80% 100%
Note: Cross-country averages. Source: Survey of Adult Skills (PIAAC) (2012).
How much field-of-study
mismatch
is half is
In some
countries around
associated with qualifications
qualifications mismatch?
Field-of-study,
qualifications
and mismatch
skills mismatch
>50% field
of study
Field-of-study
and skills mismatch
is independent
of skills or
100%
mismatch (usually overqualification)
Field-of-study and qualifications mismatch
Field-of-study mismatch only
qualifications mismatch
80%
60%
40%
20%
Source: Survey of Adult Skills (PIAAC) (2012).
Spain
Ireland
Italy
England/N. Ireland (UK)
Austria
Canada
France
Japan
Germany
Norway
Sweden
Australia
Country Average
United States
Estonia
Russian Federation
Denmark
Czech Republic
Korea
Netherlands
Finland
Flanders (Belgium)
Poland
Slovak Republic
0%
What causes field-of-study mismatch?
• Saturation: there are too many graduates from
this field and fewer jobs in the corresponding
sector
– Roughly: Number of graduates from the field
Number of workers in that sector
(for more details, click HERE)
• Skill transferability: skills from the field are
transferrable / valued in other sectors
– Roughly: Number of skills well-matched in that sector
Number of FoS mismatched in that sector
(for more details, click HERE)
Does saturation and transferability predict
field of study mismatch?
The short answer: YES
Graduates from more saturated
fields are more likely to be
mismatched (and overqualified)
Graduates from fields with more
transferability are more likely to
be mismatched and well qualified
Results hold within countries as well
Note: Path analysis with country fixed effects. Source: Survey of Adult Skills (PIAAC) (2012).
Does field-of-study mismatch imply a
wage penalty?
The short answer: Yes, when it
also involves overqualification
Field-of-study alone carries a
penalty only in England/N.
Ireland (UK) (6%), Ireland (11%)
and Estonia (8%)
Note: Path analysis with country fixed effects. Source: Survey of Adult Skills (PIAAC) (2012).
The penalty varies by field
Intercept
Field of study mismatch only
x Skill transferability
x Major: (2) Teaching
x Major: (3) Humanities
x Major: (4) Social sciences
x Major: (5) Sciences
x Major: (6) Engineering
x Major: (7) Agriculture
x Major: (8) Health
Field of study mismatch and
overqualification
x Skill transferability
x Major: (2) Teaching
x Major: (3) Humanities
x Major: (4) Social sciences
x Major: (5) Sciences
x Major: (6) Engineering
x Major: (7) Agriculture
x Major: (8) Health
Beta
2.46 ***
0.05 **
S.E.
(0.05)
(0.02)
-0.09 **
-0.06 *
-0.11 ***
-0.07 **
-0.04 *
0.07
-0.04
(0.03)
(0.03)
(0.02)
(0.02)
(0.02)
(0.04)
(0.02)
-0.04 *
(0.02)
-0.24 ***
-0.22 ***
-0.25 ***
-0.23 ***
-0.21 ***
-0.02
-0.20 ***
(0.03)
(0.03)
(0.03)
(0.03)
(0.03)
(0.04)
(0.03)
The penalty is stronger when
there is overqualification,
particularly for Teaching,
Humanities, Social Sciences,
Sciences and Engineering
Linear regression with log(wages) as
dependent variable. Services is the
reference category for field of study.
Models control for age, experience,
tenure, contract type, public/private,
firm size, numeracy, education level.
Source: Survey of Adult Skills
(PIAAC) (2012)
Does field-of-study impact the risk of
being out of work and job satisfaction?
• Previously mismatched by field of study are more
likely than previously well matched workers to be
unemployed or inactive (18% vs. 14%)
– Significant in 17/22 countries
– ESP, KOR, NOR, USA: FoS mismatched workers
have over twice the odds of being unemployed or
inactive
– Once out of work, previously mismatched
workers do not spend more time out of work
• Job satisfaction is generally high (79%). FoS
mismatched are less satisfied only if FoS mismatch
implies overqualification
– It remains significant in CAN, FIN, KOR, USA
after accounting for overqualification
What are the costs of field-of-study
mismatch to countries?
• Potential sources of costs:
– Losses in productivity (reflected in lower
wages earned by mismatched individuals)
– Sunk education costs
– Higher unemployment benefits and lost
income tax revenues
• Total cost depends on
– Number of mismatched individuals
– Effect of mismatch
The cost of field-of-study
mismatch
can from
Highest share
of costs comes
amount to more than
1% ofcosts
GDP(wages), most
productivity
of which result from the
overqualification
associated
to
Productivity
Education
Unemployment
FoS mismatch (assumes a 50week work year)
Percentage of GDP
3.0%
2.5%
2.0%
Sunk education costs assume that
“lost” education amounts to ½ a
year for ISCED 3 and 1 year for
ISCED 5.
1.5%
1.0%
0.5%
0.0%
Finland
Norway
Sweden
France
Denmark
Austria
Flanders (Belgium)
Italy
Japan
Netherlands
Czech Republic
Country Average
Spain
Slovak Republic
Ireland
Poland
Korea
England/N. Ireland (UK)
-0.5%
The take-away point
• FoS mismatch results from labour
market dynamics (saturation /
shortage) and programme
characteristics (skill transferability)
• FoS mismatch is costly for
individuals inasmuch it is a source
of over-qualification
• Its costs (when it leads to
overqualification) can aggregate to
important national-level costs in
terms of productivity and sunk
education costs
“But Michael, the labour
market is awaiting you!”
The recommendations
• Promote linkage between education provision and
labour market needs
– Skills assessment and anticipation systems linked to the
definition of vacancies
• Promote skill transferability so that FoS mismatch
does not bring about over-qualification
– Competency-based occupational frameworks
– Flexible re-skilling programmes
– General education
• Forcing match may not be a good idea given labour
market dynamics
Thank you
Contact: guillermo.montt@oecd.org
Read more about our work
Follow us on Twitter: @OECD_Social
Website: www.oecd.org/els
Newsletter: www.oecd.org/els/newsletter
Saturation
• Logic: there are too many graduates from this field
and fewer jobs in the corresponding sector
– Saturation = Number of graduates from the field
Number of workers in that sector
– No one-to-one correspondence between field of
study and sector
– Standardised with a mean 0, SD 1 for all countryfield combinations
– Positive values indicate saturation greater than
on average across fields
(back)
Transferability
• Logic: skills from the field are transferrable / valued
in other sectors
Transferability= Number of skills well-matched in that sector
Number of FoS mismatched in that sector
– No one-to-one correspondence between field of
study and sector
– Interpreted as percentage of field mismatched
workers in the sector that are not skills
mismatched
(back)