Labour market mismatches

The reasons for a mismatch between labour supply and demand can be cyclical, frictional or structural, which is typically when the educational level of job-seekers does not correspond to the profiles sought on the labour market or there is a lack of geographic mobility. By using a macroeconomic-style approach involving the construction of a mismatch index, the size of the skill mismatch can be assessed by comparing the distribution of unemployment (labour supply) and employment (as a proxy for demand) by educational level, based on labour force survey data. The level of the index in Belgium suggests that job-seekers are proportionately not skilled enough to meet employers’ needs. The index is highest in Brussels, where most jobs call for highly-skilled workers, while there is a shortage of them amongst Brussels residents. In a European context, Belgium has the highest index in the EU15, but this does not go hand in hand with an aboveaverage unemployment rate. The nature of Belgium’s recruitment problems can be discerned more precisely by looking at the distribution of labour supply and demand by profession, and especially through a regional analysis of critical functions, as a diploma is not the only factor determining the probability of getting a job. Belgium has a relatively large dispersion of local unemployment rates. It is generally assumed that labour mobility helps reduce geographic mismatches on the labour market, because vacant positions in one area can be filled by people with suitable qualifications who live elsewhere. In Brussels, posts are mostly occupied by people who live in other regions. By contrast, jobs in Flanders and Wallonia are overwhelmingly done by those who live in that region, and relatively few workers commute between the north and south of the country. Workers’ characteristics play a role in the likelihood that they will commute, as witnessed by the small proportion of low-skilled workers amongst commuters. Other obstacles include the language barrier, difficulty getting to the workplace, and the costs entailed in exercising a profession. However, the fact that employers have trouble recruiting staff on both sides of the language boundary, where critical functions are similar, and that the mismatch indices for Flanders and Wallonia are alike indicates that the Belgian labour market not only has a mobility problem but also – and even chiefly – encounters qualifications and skills mismatches.