Measuring the Incidence and Impacts of Skill Gaps Among European Workers

Seamus McGuinness () and Elisa Staffa ()
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Seamus McGuinness: Economic and Social Research Institute, Dublin
Elisa Staffa: Economic and Social Research Institute, Dublin

No 17993, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In this paper, we examine the incidence of skill gaps among European employees. We identify the worker and firm level characteristics most commonly associated with skill gaps and investigate the extent to which this particular form of skill mismatch is associated with wage penalties. In 2021, we find that 16.2% of EU employees had essential and non-essential general skill gaps. The incidences for competency specific skill gaps were 29.5% for numeracy skills, 39.7% for technical skills and 49.4% for social skills. Among employees we find that general skill gaps were highly correlated with numeracy, social and technical skills gaps. The more complex the job, the higher the probability for workers to report having a general skill gap or a domain specific skill gap. We find no evidence that skill gaps are associated with negative productivity impacts (proxied by wages). We find that, where skill gaps exist, they are likely to be driven by workers motivated to keep pace with evolving requirements in more complex jobs. This is very different from the usual view of skill gaps as being concentrated among poorly educated workers in low value-added employment lacking essential skills.

Keywords: job complexity; wages; skill gaps; measurement; policy (search for similar items in EconPapers)
JEL-codes: J20 J24 J31 J38 (search for similar items in EconPapers)
Date: 2025-07
New Economics Papers: this item is included in nep-eec and nep-hrm
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