Skill Mismatches and Anticipation of the Future Labour Market Need: Case of Croatia

Skills are the key elements contributing to the prosperity of nations and to better lives for individuals. That is why countries have invested heavily in skills over past decades. For workers, skills mean employability and social mobility. For society, skills represent a major component of its productivity, competitiveness and innovation. An important dimension of labour market disequilibria is the mismatch of supply and demand of different skills at the sectoral, regional and occupational levels. This is due to slow adjustment of skill structures in periods of rapid structural change that characterizes the post-transition economy. Skill mismatches may be caused by ineffective signalling of labour market demands to education and training providers and to individuals, but they are very often a consequence of a lack of responsiveness on the part of education and training providers to information about skills demand. Croatia is not unique in having a relatively high interest for adjusting (matching) educational output with dynamic trends on the labour market. Croatia does not have a system of labour market information on occupational trends. Thus, it is impossible to specify which kinds of future requirements and unmet demands are commonly perceived. Taking into account the process of globalization process Croatia is undergoing, economic restructuring and the pressures of competition, demographic factors, there is an obvious need for more effective planning and management of the education system particularly to put more attention to long-term forecasting of labour market needs. Thus, it will be necessary to monitor systematically the labour market and occupational trends to insure better labour market information on occupational trends. Furthermore, it is important to provide and/or improve transparent information on employment status of graduates from various education programmes, and to insure more flexible adjustments of enrolment quotas in education and training programmes. JEL Classification: J21, J24