Greater skill utilisation and skilled migration needed to boost productivity in Ireland

December 05, 2017

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Labour Markets and Skills
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New research published by the ESRI today (5 December) finds that greater skill utilisation and skilled migration are required to support a productive and competitive economy. The research examines the difference between the skills possessed by employees and those required to do their job. The report also explores sources of future skilled labour supply, including Ireland’s ability to attract high-skilled migrant workers.

Skills mismatch

  • 46 per cent of full-time Irish employees report that their skills are greater than those required to do their job. This is the fourth highest rate of skill underutilisation out of 28 EU countries.
  • Approximately 8 per cent of Irish employees state that their skill levels are below what is required to do their job. While this is much lower than the rate of skill underutilisation, it is still relatively high by European standards.
  • Consequently, a relatively low number of Irish employees feel that their skills are matched to their job. The rate of “matched employment” in Ireland, at 46 percent, is the fourth lowest in the EU.
  • By better aligning peoples’ skills and their jobs, we could potentially boost economic growth.

Potential sources of future labour supply

  • Ireland attracts high-skilled migrant workers. The share of foreign-born full-time workers with third-level education in Ireland is the third highest in the EU, at 57 per cent.
  • People who are outside of the labour force – neither employed nor looking for work – are predominantly female, over 45 years of age with relatively low levels of education.
  • The unemployed are predominately male and, relative to those outside the labour force, are younger and have higher levels of education.
  • Only a very small proportion of those outside the labour force have some attachment to the labour market: being classified as either ‘seeking work but not immediately available’ or ‘available for work but not seeking’. As such, the potential to increase the workforce from this group appears relatively weak. Therefore, as has been the case in recent decades, it is likely that immigration will represent an important source of skilled labour for Ireland in the future.

Paul Redmond, Research Officer, ESRI, stated, “Cultivating a skilled labour force is key to supporting a productive and competitive economy. As this analysis finds evidence of skill underutilisation in Ireland, policymakers must consider new approaches that harness the education and skills already acquired by workers.”