Technical and vocational education and training (TVET) and tertiary education systems are known to be under pressure to deliver graduates meeting the labour market demand. The performance of these systems is commonly judged by the: a) scale of shortages of skilled labour reported by employers, and b) surpluses of graduates, some of whom may be unemployed or employed in low-skilled or different occupations leading to occupational and qualification mismatches.

Imbalances between the supply and demand for skilled labour may arise for various reasons. For example, because the increasing education level of the population is outperforming the growth of skilled jobs in the economy or the TVET graduates are not absorbed by industries. Also, trained persons may move abroad, etc.

 Due to the lack of relevant labour market information (LMI) on shortages and surpluses of skilled labour or lack of expertise in how to use it, TVET systems commonly operate as (i) those “student demand driven” or (ii) whose training programs’ delivery is determined by the availability of resources, instructors, and equipment. In particular, the availability of LMI and its use in programming of professional education help reduce risks of shortages and surpluses of skilled labour in the regional markets. Most countries conduct a Labour Force Survey (LFS) collecting quarterly data on employment, unemployment and other characteristics of the population. An LFS collects, inter alia, data on the occupational structure of the labour force.

The ISCO-08 levels 3 and 4 are the levels of detail required for a comprehensive analysis of the labour force by individual occupations. Importantly, these two levels are used as LMI-based guidance for planning TVET delivery. For TVET delivery planning a concept of «additional” demand for skilled labour is largely used. It is based on estimates of skilled labour by occupation and produced annually following regional employment trends.

It should however be noted that, generally, the national labour market-oriented statistical surveys (an LFS, a Labour Turnover Survey, etc.) do not aim to advise TVET and tertiary education systems directly. Because of that, while countries have such powerful statistical tools as an LFS, the National Statistical Organisations (NSOs) do not usually provide the Ministries of Education and Ministries of Labour with data on persons employed by industry and occupation at ISCO-08 levels 3 and 4 (minor and unit groups) and do not produce estimates of replacement demand. This leads to the situation when national TVET and Higher Education authorities lack a comprehensive LMI containing data on shortages and surpluses of skilled labour, which hampers making operational evidence-based decisions about training programmes, balancing the delivery of TVET graduates and planning optimal skilled labour replacement.

 This ISP Session will present an innovative method developed by the team of international experts working on the ILO and UNDP projects in Armenia (Unleashing Employment and Income Generating Opportunities for the Youth in the Regions of Armenia) and the Philippines (Skills for Prosperity: Output 3. Strengthening TVET and LMIS, data collection and analysis), which has made it possible to modify and enhance the LFS tools of these two countries to produce (i) additional labour market information needed for TVET delivery planning; (ii) employment occupational structure at ISCO-08 levels 3 and 4 enabling to anticipate skills demand by occupation; (iii) measuring the additional demand for skilled labour; as well as (iv) extend the use of occupations of unemployed persons with previous employment experience to estimate skilled labour supply along with data on TVET graduates.

Abstract

TVET and tertiary education systems are known to be under pressure to deliver graduates meeting the labour market demand.  The performance of these systems is commonly judged by the: a) scale of shortages of skilled labour reported by employers, and b) surpluses of graduates, some of whom may be unemployed or employed in low-skilled or different occupations leading to occupational and qualification mismatches.

Imbalances between the supply and demand for skilled labour may arise for various reasons. For example, because the increasing education level of the population is outperforming the growth of skilled jobs in the economy or the TVET graduates are not absorbed by industries. Also, trained persons may move abroad, etc.

Likewise, an imbalance in the occupational structure of the labour market could arise because TVET and the tertiary systems may continue producing graduates in occupations that give them little or no chance of finding a job as the local labour market may already be saturated with persons having similar occupational profiles.

Due to the lack of relevant labour market information (LMI) on shortages and surpluses of skilled labour or lack of expertise in how to use it, TVET systems commonly operate as (i) those “student demand driven” or (ii) whose training programs’ delivery is determined by the availability of resources, instructors, and equipment.

In particular, the availability of LMI and its use in programming of professional education help reduce risks of shortages and surpluses of skilled labour in the regional markets.

Most countries conduct a Labour Force Survey (LFS) collecting quarterly data on employment, unemployment, and other population characteristics. An LFS collects data on the occupational structure of the labour force. The ISCO-08 levels 3 and 4 are the levels of detail required for a comprehensive analysis of labour force by individual occupations. Importantly, these two levels are used as LMI-based guidance for planning TVET delivery.

For TVET delivery planning a concept of «additional” demand for skilled labour is largely used. It is based on estimates of skilled labour by occupation and produced annually following regional employment trends.

The «additional” demand refers to the labour force required to:

1. Ensure annual expansion of industry employment («Expansion demand»).
2. Replace skilled workers separating from their jobs because (a) quitting the labour force, and (b) changing occupation while changing jobs («Replacement demand»)

Both streams of demand commonly exist in any economy - even if there is no industrial employment expansion, the replacement demand would always exist simply due to labour turnover.

It should however be noted that, generally, the national labour market-oriented statistical surveys (an LFS, a Labour Turnover Survey, etc.) do not aim to advise TVET and tertiary education systems directly. Therefore, the professional education systems must identify, interpret and use additional LMI containing estimates of anticipated annual demand for skilled labour and detailed occupational structure of the labour force.

Because of the above, while countries have such powerful statistical tools as LFS, the National Statistical Organisations (NSOs) do not usually provide the Ministries of Education and Ministries of Labour with data on persons employed by industry and occupation at ISCO-08 levels 3 and 4 (minor and unit groups) and do not produce estimates of replacement demand. This leads to the situation when national TVET and Higher Education authorities lack a comprehensive LMI containing data on shortages and surpluses of skilled labour, which hampers making operational evidence-based decisions about training programmes, balancing the delivery of TVET graduates, and planning optimal skilled labour replacement.

This ISP Session will present an innovative methodological approach developed by the team of international experts working on the ILO and UNDP projects in Armenia (Unleashing Employment and Income Generating Opportunities for the Youth in the Regions of Armenia) and the Philippines (Skills for Prosperity: Output 3. Strengthening TVET and LMIS, data collection and analysis), which has made it possible to modify and enhance the LFS tools of these two countries to produce (i) additional labour market information needed for TVET delivery planning; (ii) employment occupational structure at ISCO-08 levels 3 and 4 enabling to anticipate skills demand by occupation; (iii) measuring the additional demand for skilled labour; as well as (iv) extend the use of occupations of unemployed persons with previous employment experience to estimate skilled labour supply along with data on TVET graduates.

Organiser: Mr Igor Chernyshev 

Chair: Cezar Dragutan 

Speaker: PROF. DR. Teimuraz Beridze 

Speaker: Dr Margarita Rohr 

Speaker: Lusine Kalantaryan 

Discussant:  Mr Igor Chernyshev