Page 35 - IDEA Study 10 2015 Skills Mismatches

7. Conclusion Motivated by increasing uncertainty about prevalence of skill mismatches in the European Union countries, this study examined skill mismatches on the Czech labor market from several perspectives. First, using aggregate trends in educational structure of the population and unemployment rates of graduates, the study analyses the impact of the changing structure of graduates from secondary and tertiary education on the youth unemployment rates. Second, using aggregate statistics on unemployment and vacancy rates, the paper studies the aggregate efficiency of the job matching process in the Czech Republic and its evolution over time. Third, using individual-level survey data from the Czech Labor Force Survey, the prevalence of horizontal and vertical skill mismatches is studied. This study shows that the Czech educational system is highly concentrated on technical fields, which is consistent with the heavily industrialized Czech economy. Graduates of technical fields seem to be well matched to their current occupations in terms of both vertical and horizontal qualification structure, and unemployment rates of graduates from secondary education in technical fields are among the lowest. For tertiary educated, the lowest unemployment rates are among graduates of pharmacy, medicine, law, pedagogy, and information technology, which are also the fields with the lowest share of horizontal and vertical mismatches. The main findings suggest that the Czech labor market is in a good shape and the efficiency of the matching process is relatively high. The Czech labor market is marked by persistently low unemployment rates of young graduates and low vertical qualifications mismatch in international comparison. The horizontal mismatch is also not exceptionally high in international comparison. Both vertical and horizontal mismatches differ substantially across fields of study, which is a natural consequence of different levels of specialization in different fields of education. Even though this study identified certain fields of education which are connected to high levels of vertical and horizontal mismatches, I found only weak correlation between the mismatch and unemployment rates across fields of study. Therefore, the policy recommendations are not as straightforward as they might seem. Both horizontal and vertical mismatches are highly affected by specific definitions of these indicators, and particularly for the horizontal mismatch, there are fields of education which do not have a 31