Skills mismatch: what do we already know and what do we need to know?

This chapter aims to provide a state-of-the-art overview of the skills mismatch literature and offers recommendations for the future direction of research. Previous examinations of skills mismatch literature highlight a disconnect between evidence generated by academic studies on skills mismatch and the direction of skills policy initiatives. Upon examination of the most recent literature on skills mismatch (between 2017 and 2022), this disconnect persists. Furthermore, despite the general rise in the proportion of young people attaining third-level qualifications, the incidence of overeducation among graduates entering the labour market has been trending downwards between 2008 and 2022. However, regardless of these findings, supply-side institutions and the nature of third-level education provision remain central factors in any policy initiatives aimed at reducing the incidence of overeducation and overskilling. The research highlights the need for future studies to explore a range of potential and feasible hypotheses regarding the ways in which the organisation of labour within firms and demand-side factors contribute to the different forms of skills mismatch.