A new C.D. Howe study argues governments, business and individuals should seize the tools available to narrow the gap between people’s skills and their jobs in order to improve productivity and accelerate economic growth.
The study – which uses results from the Programme for the International Assessment of Adult Competencies (PIAAC) finds that approximately six to seven per cent of workers in Canada are either over-skilled or under-skilled for the jobs they hold. PIAAC is an international assessment of adult skills
In total, 13 per cent of all workers fall into both categories. This figure is similar to other countries in the OECD including Germany (12.8), Austria (12.5) and the U.S. (13.3).
The study offers a practical framework for addressing skills gaps:
1. Addressing under-skilling through lifelong learning, business investment and other complementary policies will reap important benefits for the economy and individuals.
In general, skills increase with higher levels of education, as the distribution of PIAAC literacy scores provided in the C.D. Howe study shows:
2. Different tools may be required to address the needs of over and under-skilled individuals.
Over-skilling is more prevalent among younger workers and new entrants to the labour market. “Engagement in work-integrated learning opportunities before graduation … can help educated individuals gain job-related skills and also obtain useful information about the gap in skills they acquired during formal education and those they need to use at work,” the study states.
Under-skilling is evident among older workers, newcomers to Canada and women. The C.D. Howe study calculates that “senior workers aged 55 to 65 are about 1.8 times more likely to be under-skilled than those aged 45 to 54.”
3. Policies can make a significant impact.
The experience of newcomers to Canada shows that well-designed policies can improve the match between skills and work. “In the case of immigrants, the under-skilled problem entirely disappears with time spent in Canada, highlighting the importance of settlement policies that provide rigorous and accessible skills training, language programs, and job-search workshops for newcomers,” the study states.