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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