Young people around the world are more educated than ever before, but that’s a potential

problem. If markets are flooded with qualified or overqualified job applicants, and if most young
people apply for only a narrow subset of jobs, then recent graduates will not find employment, or
they will be underemployed

Skills mismatch is a discrepancy between the skills that are sought by employers and the
skills that are possessed by individuals. Simply put, it is a mismatch between skills and
jobs. This means that education and training are not providing the skills demanded in
the labour market, or that the economy does not create jobs that correspond to the
skills of individuals.

It was a recognized issue across the world causing poverty and unemployment.

The term skill mismatch is very broad and can relate to many forms of labour market friction, including
vertical mismatch, skill gaps, skill shortages, field of study (horizontal) mismatch and skill obsolescence.

Skill gaps Skill gaps measure the extent to which workers lack the skills necessary to perform their current
job. Generally speaking, skill gaps are usually measured by collecting information from the employer on the
perceived skill deficiencies of workers; when similar questions are directed at workers within 8 firms this is
usually akin to underskilling, although the form of the question is likely to differ.

Skill Obsolescence This refers to the process by which workers’ skills become obsolete. Skills can become
obsolete due to ageing which depreciates certain manual skills (physical obsolescence), through
technological or economic change which renders certain skills unnecessary (economic obsolescence) or
through the underutilisation of skills

A skill shortage exists when employers can't fill vacancies in an occupation or in a

specialisation of that occupation. For this definition to hold true, the vacancies must:

 reflect current levels of pay and standard employment conditions

 exist in a location that is easy to access.

Overskilling and underskilling Overskilling describes the situation whereby the worker believes that they
possess more skills than their current job requires, whereas, underskilling describes the situation whereby
the worker believes that their current skills do not meet the demands of the job.

Why is it important to address the skills

mismatch challenge?
The consequences of skills mismatch reach all levels of the labour market.

At the individual level there are serious wage penalties especially for
overqualification that eventually affect both job and life satisfaction. For example,
you would assume that in developing countries overqualification should not be a
problem because of a lack of sufficient training opportunities. However, people
receive training and are still unable to find a job that corresponds to their skill
level, which means they are not employed at their full productivity potential. In
addition, skill deficiencies decrease chances of landing a job altogether.

For companies skills mismatch has negative consequences for productivity and
competitiveness, which affects their ability to implement new products, services
or technologies. What is more, skills mismatch causes higher staff turnover and
sub-optimal work organization. Eventually skills mismatch leads to the loss of
profits and markets.
 For countries and regions skills mismatch can increase unemployment, and
affect competitiveness and attractiveness to investors, meaning lost opportunities
on the pathway to productive transformation and job creation. Public or private
resources are invested in training with the assumption that achieved
qualifications will yield positive results in terms of employment insertion or
wages. Yet, if skills mismatch is present, these expectations often do not
materialize, leading to returns on investment that are lower than expected.

The Philippines is also experiencing education-job mismatch and has been a common phenomenon in the
field of employment since then. Colina (2014) stated in his article which talks about the Educational
mismatch that happened and is still happening now. He had stated that according to the Department of
labor and Employment, when the skills required for the job does not fit with the what the job seeker has, it
is considered as job mismatch, saying it is a crucial problem and it does not happen only in the Philippines.
It brings a massive impact on the unemployment rate of a country. The labor department discusses this
with the sector of education namely DepEd, CHEd, and TESDA, to update their curricula that will enhance
the skills of the students to meet the requirements of the industries.

We know that the structure of the higher education system in a country is strongly linked to career
expectations and the skills gap. In Northern European countries, where the vocational higher
education system is effective and well developed, the skills gap is much smaller. So, elsewhere,
finding creative ways to more closely align educational offerings and society’s needs for economic
development is vital. Just as important, however, is career guidance for young people, which has
never been as important as it is now. There needs to be a symbiotic relationship between industry
and universities to help young people understand job and career options and to develop curricula
that create a smooth transition from formal educational settings into the world of work.

A mismatched worker will experience human capital depreciation which is caused by working in a different
field compared to his/her field of study. While studying, a student is formed and is feed with learnings and
skills that will help him/her in the future. If your field of study does not match with your current job, those
knowledge and skills you have acquired will slowly depreciate because you are working in an area you are
not supposed to. You will be forced to transform the skills you originally had before having a job, to the
skills your current job needs.

Do student expectations of employability align with the reality that awaits them, and if not
then what role can higher education institutions play in closing the gap?

1. To what extent do you perceive that there is a skills/job mismatch in your

geographical area or country? What are some of the possible explanations
for this situation? How can internationalisation help mitigate such situations?
2. What role(s) do you see for universities of applied sciences, and/or
vocational higher education institutions to help resolve skills/job mismatches,
particularly in a globalised economy? What role do you think
internationalisation strategies have at these types of institutions to help
resolve skills/job mismatches?
3. Do you think that a country’s lack of investment in its human capital is a good
explanation for the skills/job mismatch? If not, what else do you think can
explain it?
4. What can universities do to help their students – domestic and international –
consider their working lives more broadly and creatively?