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Labour market institutions and the challenge of allocating the right people to the right jobs: Evidence on the relation between labour market institutions and optimal skill matching from 28 industrial countries

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  • Fregin, Marie-Christine
  • Levels, Mark
  • van der Velden, Rolf

Abstract

This article provides empirical evidence on the relation between institutional characteristics of labour markets that frame allocation processes, and optimal skill matching at the individual level. We investigate the extent to which skill-based job-worker matches are associated with employment protection legislation (EPL), unemployment benefits, and enforcing and enabling activating labour market policies. Drawing on data of the OECD’s Programme for the International Assessment of Adult Competencies (PIAAC), and performing cross-country analyses of 28 industrial countries, we find that EPL can explain variance in the share of optimal skill matching across countries, displaying a positive relation. We also find a negative relation between strict enforcing activating labour market policies and optimal skill matching.

Suggested Citation

  • Fregin, Marie-Christine & Levels, Mark & van der Velden, Rolf, 2020. "Labour market institutions and the challenge of allocating the right people to the right jobs: Evidence on the relation between labour market institutions and optimal skill matching from 28 industrial," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 50(2), pages 257-275.
    • Handle: RePEc:zbw:espost:218856
    DOI: 10.1080/03057925.2019.1695197
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    References listed on IDEAS

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    1. Green, Francis, 2013. "Skills and Skilled Work: An Economic and Social Analysis," OUP Catalogue, Oxford University Press, number 9780199642854.
    2. Giesselmann, Marco, 2014. "The Impact of Labour Market Reform Policies on Insiders’ and Outsiders’ Low-Wage Risk," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 30(5), pages 549-561.
    3. van der Velden, Rolf & Bijlsma, Ineke, 2017. "Skill effort: A new theoretical perspective on the relation between skills, skill use, mismatches, and wages," ROA Research Memorandum 005, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    4. Sara Flisi & Valentina Goglio & Elena Claudia Meroni & Margarida Rodrigues & Esperanza Vera-Toscano, 2017. "Measuring Occupational Mismatch: Overeducation and Overskill in Europe—Evidence from PIAAC," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 131(3), pages 1211-1249, April.
    5. Michele Pellizzari & Anne Fichen, 2013. "A New Measure of Skills Mismatch: Theory and Evidence from the Survey of Adult Skills (PIAAC)," OECD Social, Employment and Migration Working Papers 153, OECD Publishing.
    6. Knotz, Carlo Michael, 2012. "Measuring the 'new balance of rights and responsibilities' in labor market policy: A quantitative overview of activation strategies in 20 OECD countries," Working papers of the ZeS 06/2012, University of Bremen, Centre for Social Policy Research (ZeS).
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    8. Ochsenfeld, Fabian, 2018. "The Relational Nature of Employment Dualization: Evidence from Subcontracting Establishments," SocArXiv ta4r6, Center for Open Science.
    9. Allen, J.P. & Levels, M. & van der Velden, R.K.W., 2013. "Skill mismatch and skill use in developed countries: Evidence from the PIAAC study," ROA Research Memorandum 017, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    10. Allen, J.P. & Levels, M. & van der Velden, R.K.W., 2013. "Skill mismatch and use in developed countries: Evidence from the PIAAC study," Research Memorandum 061, Maastricht University, Graduate School of Business and Economics (GSBE).
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