IDEAS home Printed from
   My bibliography  Save this paper

The Europe 2020 Strategy and Skill Mismatch


  • G.A. Meagher
  • R.A. Wilson
  • Hector Pollitt


In a recent study, the European Centre for the Development of Vocational Training (Cedefop) investigated the expected effect on European labour markets of the transition to a high-employment, low-carbon economy. The study extended its previous initiatives in skills forecasting to determine employment under different policy scenarios derived from the Europe 2020 Strategy. This strategy includes the so-called 20-20-20 climate and energy targets, namely, * a reduction in EU greenhouse gas emissions of at least 20% below 1990 levels; * a requirement that renewable sources represent 20% of EU final energy consumption; * a reduction in energy consumption of 20% from projected 2020 levels by improving energy efficiency. It also includes an employment target whereby 75% of the population aged 20-64 will be employed by 2020. In its quantitative analysis it employs the E3ME macro-econometric model to determine the effects of transition on the demand for labour by industry. The industry projections are then converted into demand for labour by skill (as represented by occupation and qualification) using employment shares taken from the earlier forecasts. The implementation of a demand-side policy package like the 2020 Strategy introduces structural pressures into the markets for labour in the sense that it creates tendencies towards excess demands for, or supplies of, skills. If the pressures are not accommodated by supply-side policies (such as training programs), they will tend to emerge as changes in relative wage rates and/or unemployment rates. One purpose of Cedefop's analysis is to reveal the nature of the structural pressures the Strategy releases, and hence kind of training programs that are required. However, its scope is limited because it abstracts from constraints imposed by the available supplies of labour. In this paper a CGE-style labour market extension MLME to the E3ME model is used to investigate how labour supply considerations affect the skill requirements of the Strategy. Specifically, it investigates the proclivity of the Strategy to produce mismatches between the demand for, and supply of, labour differentiated by occupation. Results are reported and compared for 26 EU countries.

Suggested Citation

  • G.A. Meagher & R.A. Wilson & Hector Pollitt, 2015. "The Europe 2020 Strategy and Skill Mismatch," Centre of Policy Studies/IMPACT Centre Working Papers g-259, Victoria University, Centre of Policy Studies/IMPACT Centre.
  • Handle: RePEc:cop:wpaper:g-259

    Download full text from publisher

    File URL:
    File Function: Initial version, 2015-12
    Download Restriction: no

    File URL:
    File Function: Local abstract: may link to additional material.
    Download Restriction: no

    References listed on IDEAS

    1. G.A. Meagher & Felicity Pang & R.A. Wilson, 2014. "Interfacing a CGE Labour Market Model with the E3ME Multi-Sector Macroeconomic Model," Centre of Policy Studies/IMPACT Centre Working Papers g-248, Victoria University, Centre of Policy Studies/IMPACT Centre.
    2. G.A. Meagher & R.A.Wilson & E.Yerushalmi, 2014. "Emerging Structural Pressures in European Labour Markets," Centre of Policy Studies/IMPACT Centre Working Papers g-249, Victoria University, Centre of Policy Studies/IMPACT Centre.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Forecasting; CGE models; hybrid models; labour markets; structural imbalances;

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cop:wpaper:g-259. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Horridge). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.