Page 37 - IDEA Study 3 2018 Low skilled

the alternative definition of the low-skilled using the whole sample of individuals representative of the population.14 However, we can apply the alternative definition to those employed (which we observe in the AEIS data) and compare the two alternatively defined groups of the low-skilled. In what follows, we define “the low-paid“ as those individuals in the AEIS data whose gross monthly wage is at the level of the 10th percentile of the wage distribution (about CZK 12,970) or lower. We continue in denoting “the low- skilled” as those with ISCED education level 0-2. The alternative definition of the low-skilled as “the low-paid“ reveals the groups of individuals that may be misclassified by the standard definition of ISCED group 0-2. Based on our alternative definition, there is only about 11% of the low-skilled in the private sector and 41% in the public sector who are low-paid (Table 24). The remaining shares of the low-skilled earn more than the 10th percentile of the wage distribution. On the other hand, there is as much as 5.6% among the lower middle-skilled (ISCED group 3) in the private sector and 16.3% in the public sector who are classified as low-paid. Table 24. Relationship Between the Low-skilled and the Low-paid Source: AEIS data 2014-2016, own calculation. Plant and Machine Operators and Assemblers with ISCED 0-2 level of education are probably (based on their wage and occupational skills) misclassified as the low-skilled, whereas lower-middle skilled individuals (ISCED 3) working in Elementary Occupations should be classified (based on their wage and the skills used in their jobs) as the low- skilled but are not. 14 Moreover, the wage imputation technique uses demographic characteristics to calculate potential earnings of the non-working, and the main predictor of potential earnings is usually the highest level of education attained. Therefore, wage imputation cannot solve the problem of the standard definition of the low-skilled (by education), because wage imputation is largely built on the level of formal education. Share of Low-paid in % Private Sector Public Sector Low-skilled 10.87 41.42 Lower middle-skilled 5.59 16.26 Upper middle-skilled 2.16 2.53 High-skilled 0.56 0.29 35