Projecting demand and supply of labour by education, Study notes of Statistics

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Projecting demand and supply of labour by education

Experiences from Norway

BJORN DAPI, HEGE MARIE GJEFSEN AND NILS MARTIN STØLEN

Main modules

• Demographic projections

◦ Annual cohort-component model

• Macroeconomic projections by main industries

◦ Quarterly/annual model based on National Accounts and econometric connections

• Change in composition of employment in each industry

• Projections of labour supply by qualification/education

◦ Annual dynamic microsimulation model, but sufficient with a cohort-component model

• Further information: Reports 2016/

◦ https://www.ssb.no/arbeid-og-lonn/artikler-og-publikasjoner/education-specific-labour-force-and-

demand-in-norway-in-times-of-transition

Labour classification

• Dependent on available statistics

• Classification by occupation common for analyses of demand for labour

• Skills or education more relevant for analyses of supply

• Your occupation may change when you start in a new job

• Skills and education more fixed

• More distinct borderlines between different educations than occupations

• In Norway level and fields of education from administrative registers

How many detailed groups?

It depends on:

• Available statistics

• More details demand more resources, and results are more uncertain

• Possible with more details when discussing the present situation

• Small benefits from separating groups with large possibilities of substitution

• Technical limits for the number of groups in a general approach

• No technical limits when dividing into subgroups and for partial analyses

Classification used (cont.)

• Partial projections for specific groups

◦ Educations towards health and care

◦ Different kinds of teachers

• Common characteristics for these projections

◦ Borderlines between different groups

◦ Demographic development important for demand

◦ Demand mainly regulated by local and central government

Macroeconomic projections of employment by industry

• Time-series from the National Accounts and econometric connections

• 15 main industries in the model

• Level of production determined from demand except from resource based

industries

• Most important exogenous factors

◦ Demographic development

◦ Prices and activity in resource based industries

◦ International economic development, prices and rate of interest

◦ Economic policy including use of labour in the public sector

Projections by level and field of education

Two main components

• Change in employment between industries

• Change in composition within each industry

◦ Includes change in composition caused by technical progress

Composition by level and field of education

• Based on observation of recent changes for each industry

• Look at changes in composition between levels first

• Thereafter look at changes in composition between fields within each level

Projecting the labour force

• Labour force = Employed + Unemployed

• Population in working age from official projections 2018

• Labour market participation by age, gender and education

• Know the level and field of education for those in work

• Projection of education for natives and immigrants

Persons entering

Labour force

Persons leaving

Composition of labour force

• Dependent on those entering and those leaving

• Educational level among new entrants is much higher than for

those who entered some decades ago

• Large changes over time in level and field of education

Secondary education Secondary education Labour force

Inflow versus replacement demand Economics and administration, bachelor level

• The number of new entrants is much higher than the number of those who leave 0

Labour force Entering Leaving

Nursing and caregiving, bachelor level

• Only a few more entering than leaving

• The number of persons in the labour

force is almost constant

Labour force Entering Leaving

Projections by level of education. 1000 persons

Primary and unknown, supply Upper secondary general, supply

Upper secondary, vocational, supply Bachelor, supply

Master, supply Primary and unknown, demand

Upper secondary general, demand Upper secondary, vocational, demand

Bachelor, demand Master, demand

Secondary vocational education towards manufacturing, building an construction and crafts Share of total labour force (17%)

Electronics, mechanical

and machinery

Building and

construction

Other crafts

Supply Demand