Chapter 5: Skills and the labour force

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Overview and highlights

This chapter focuses on the skills of labour force participants. First, the difference in workers’ skills between the top and bottom 25 percent of performers is compared. This allows for a comparative assessment of the skills supplied in the labour market. Second, the employability of working-age adults is studied. This is done by comparing the likelihood of experiencing labour force inactivity and unemployment over the cycle of one year for persons who are at low and medium to high levels of skill. Finally, the employability analysis is extended to also include younger and older workers.

Several key findings arise from the analysis presented in this chapter:

The Norwegian labour force has the highest top and bottom 25 per cent of performers on the prose, document and problem solving scales. The Swiss labour force is best qualified on the numeracy scale.

The highest scoring working adults tend to be the most numerous in the group aged 26 to 45 and fewest among older workers aged 46 to 65. The group aged 16 to 25 lies somewhere in between. Many adults aged 26 to 45 have been exposed to learning opportunities at work that reinforce the development of their skills. This may explain why workers in early to mid career display the best skills among the top end of workforces.

Adults with higher levels of skill of the types measured in ALL tend to be more employable than adults with low skills, but not necessarily. The findings show that low skilled adults are more likely than medium to high skilled adults to experience unemployment in half of the countries and to experience labour force inactivity for six or more months in all countries except Bermuda.

Among adults who experience unemployment, those who score at higher levels on the document literacy scale have a higher likelihood of re-entering employment sooner. The results are similar for all the skills measured in ALL.

Proficiency in foundation skills such as document literacy and numeracy is strongly associated with the probability of young adults to find employment. Young adults who score at Levels 1 and 2 have a lower chance of exiting unemployment and tend to be unemployed longer than the more highly skilled.

Even though unemployment rates tend to be higher among young labour force participants, younger adults are able to exit unemployment more quickly than older adults. In fact, low skilled younger adults have better chances of finding a job than low skilled older adults. This highlights the difficulties that displaced workers face when searching for job at an older age. Even so, older adults with higher skills find it easier to obtain employment than those with lower skills.