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Possible uses of labour demand and supply information to reduce skill mismatches
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Unemployment and informality are widespread phenomena in the Colombian economy that affect people with different profiles. This working paper discusses how the vacancy database can be used to build a detection system of skill shortages. Also, it elaborates on, for the first time in Colombia, a set of macro indicators within the vacancy database's labour demand and supply information for the identification of possible skill shortages. Finally, it illustrates how detailed information from vacancies (job descriptions) can be used to update occupational classifications (ISCO) and the labour force skills according to employers' requirements. The results suggest low-skilled occupations tend to show more signs of oversupply: a considerably higher informality rate compared to other skill groups. On the other hand, the first quarter of the year for each occupation is characterised by higher unemployment rates and lower vacancy rates. The skill mismatch indicators for Colombia demonstrate that 30 occupations are currently in short supply. Therefore, the evidence suggests that formal labour market opportunities exist for people with different profiles in terms of age, education and work experience, amongst others. Based on these results, policymakers and education and training providers can promote and update policy/curriculums quickly, according to the current occupational labour demand structure and specific skills required, and the job seekers can receive relevant information regarding occupation shortages, and in this way, unemployed and informal people can make better and informed decisions about their training and job search.
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... Consequently, when there is an increase in job placements for specific occupations or skills and, in turn, there is an increase in wages, these circumstances strongly suggest the existence of a skill mismatch. Thus, the vacancy database (at this moment) is not able to provide the exact or approximate number of job placements, yet the information can be used to identify possible skill shortages (See Cárdenas, 2020b). ...
... To provide more evidence regarding the external consistency of the information gathered from job portals, and to demonstrate that vacancy data can be used to build different labour market indicators, this subsection compares the vacancy series with the level of unemployment. Usually, periods of high unemployment are associated with low levels of vacancies and vice versa (e.g. the Beveridge curve, see Cárdenas, 2020b). ...
... Thus, the results from the vacancy database are consistent with the unemployment series from the official survey. Moreover, these results suggest that it is possible to combine vacancy information with the unemployment level to build indicators to monitor the labour market, such as the Beveridge curve, by occupational groups (seeCárdenas, 2020b ...
This paper provides an evaluation of the internal and external consistency of the vacancy information. The consistency of the variables within the vacancy database or internal validity shows that the contradictory or inconsistent results that occurred in the Colombian vacancy database were minor, and the magnitude of these measurement errors are insufficient to bias the educational, occupational, sectorial, skills and wage analyses. The results of data representativeness or external validity were: 1) the vacancy database is not representative for a significant part of agricultural, government and armed force occupations; 2) particular caution should be taken when analysing occupations with high turnover rates as this issue might cause an overrepresentation of specific occupational groups; and, 3) self-employed individuals and informal occupations are not represented in the vacancy database. This evidence suggests that the vacancy database better represents the formal and urban Colombian labour market. Finally, the job portal information captures and expresses the Colombian economic seasons.
... Jobs can be available; however, the wages of those jobs might not be high enough to create a labour supply to satisfy labour demand. This variable helps to investigate whether the vacancies posted on job portals can offer wages to attract informal workers and the unemployed into formal jobs and, at the same time, helps to determine possible skill mismatches (see Cárdenas, 2020b). Figure 11 shows the distribution of monthly wages from the vacancy database. ...
... and, 13) the vacancy database can provide different information such as what skill is most demanded by occupation, trends and seasonal changes in labour demand, which might serve as an input to tackle skill shortages for a certain population sample or certain type of jobs (see Cárdenas, 2020b). ...
... First, differences between the non-imputed wage and the imputed wage are minimal. Consequently, to use imputed wages inCárdenas (2020bCárdenas ( , 2020d does not add significant noise or bias to the statistical analysis and, on the contrary, it enables an analysis of all vacancy observations. Second, the distribution of wages is consistent with the results from the previous sections: a high proportion of jobs correspond to low-and middle-skilled occupations. ...
Given the high cost of collecting labour demand for skills information through surveys, the composition and dynamics of Colombian labour demand are relatively unknown. However, information regarding unmet labour demand can be collected from job portals with the implementation of relatively novel data mining techniques. This paper provides a descriptive analysis to start evaluating the data from job portals. Among the main results of my analysis of the vacancy database show that 1) job vacancies are concentrated in Bogotá, Antioquia and Bolivar; 2) most of the job positions require a person with at least a high school certificate; 3) most occupations in Colombia correspond to middle-("Sales demonstrators") and low-skilled occupations ("Kitchen helpers"); 4) the skills most demanded include "Customer service" (knowledge), "Communication" (knowledge) and "Work in teams" (competence). Thus, the vacancy database provided detailed, real-time and valuable information about the Colombian labour demand that, previously, it was not possible to obtain from other sources (e.g. household surveys). Moreover, these initial results suggest that the vacancy database is consistent, or at least it does not contradict itself or external data, such as regional GDP, population, etc.
... In this sense, online job vacancy advertisements might provide real-time access to job offers in an economy and public policymakers might react or re-design public policies in a shorter period aligned to the current economic changes. Given the advantages of collecting online information, (Blanchard et al. 1989) (see Cárdenas, 2020a). Government, 2018). ...
... Nevertheless, as mentioned above, the project has required new statistical legislation to delineate the use of job portal information and other non-traditional information sources. Data might complement and support sectoral or household surveys and vice-versa (see Cárdenas, 2020a). 68 Some websites might adjust the number of variables displayed, such as wages, because potential workers might not apply for the job given the previous characteristics of the vacancy. ...
This working paper discusses the concepts and theoretical framework to analyse the labour market, based on the information found on online job portals. Based on a model with imperfect information (which seems more appropriate to describe Colombian labour market outcomes), the first section explains how skill mismatches can arise and their consequences for informality and unemployment rates. The second section presents evidence that skill shortages, unemployment and informality are highly occurring phenomena in Colombia; and, it is argued that workers, educational and training providers and the government can do little to address these issues because of a lack of proper information to monitor and identify employers’ requirements and possible skill shortages at an occupational level. In section 3 the concept of Big Data is introduced, with its advantages and limitations outlined for labour market analysis, this section explains the limitations and caveats to be considered when online vacancy data are used for economic analysis.
This paper provides an evaluation of the internal and external consistency of the vacancy information. The consistency of the variables within the vacancy database or internal validity shows that the contradictory or inconsistent results that occurred in the Colombian vacancy database were minor, and the magnitude of these measurement errors are insufficient to bias the educational, occupational, sectorial, skills and wage analyses. The results of data representativeness or external validity were: 1) the vacancy database is not representative for a significant part of agricultural, government and armed force occupations; 2) particular caution should be taken when analysing occupations with high turnover rates as this issue might cause an overrepresentation of specific occupational groups; and, 3) self-employed individuals and informal occupations are not represented in the vacancy database. This evidence suggests that the vacancy database better represents the formal and urban Colombian labour market. Finally, the job portal information captures and expresses the Colombian economic seasons.
Given the high cost of collecting labour demand for skills information through surveys, the composition and dynamics of Colombian labour demand are relatively unknown. However, information regarding unmet labour demand can be collected from job portals with the implementation of relatively novel data mining techniques. This paper provides a descriptive analysis to start evaluating the data from job portals. Among the main results of my analysis of the vacancy database show that 1) job vacancies are concentrated in Bogotá, Antioquia and Bolivar; 2) most of the job positions require a person with at least a high school certificate; 3) most occupations in Colombia correspond to middle-("Sales demonstrators") and low-skilled occupations ("Kitchen helpers"); 4) the skills most demanded include "Customer service" (knowledge), "Communication" (knowledge) and "Work in teams" (competence). Thus, the vacancy database provided detailed, real-time and valuable information about the Colombian labour demand that, previously, it was not possible to obtain from other sources (e.g. household surveys). Moreover, these initial results suggest that the vacancy database is consistent, or at least it does not contradict itself or external data, such as regional GDP, population, etc.
This working paper discusses the concepts and theoretical framework to analyse the labour market, based on the information found on online job portals. Based on a model with imperfect information (which seems more appropriate to describe Colombian labour market outcomes), the first section explains how skill mismatches can arise and their consequences for informality and unemployment rates. The second section presents evidence that skill shortages, unemployment and informality are highly occurring phenomena in Colombia; and, it is argued that workers, educational and training providers and the government can do little to address these issues because of a lack of proper information to monitor and identify employers’ requirements and possible skill shortages at an occupational level. In section 3 the concept of Big Data is introduced, with its advantages and limitations outlined for labour market analysis, this section explains the limitations and caveats to be considered when online vacancy data are used for economic analysis.
The Beveridge curve -- the scatter plot of unemployment rates versus vacancy rates -- has recently shifted inward dramatically. While the Beveridge curve is often used to summarize the state of the labor market, it is not a structural economic relationship. Thus, in order to understand the labor market implications of recent shifts in the curve, we must first understand the labor market activities that give rise to the Beveridge curve.> This article examines the Beveridge curve over the past 30 years. The authors discuss some of the issues surrounding the job-matching process and attempt to estimate the extent to which changes in the job-matching function are responsible for changes in the position of the Beveridge curve. They also consider other potential sources of shifts in the Beveridge curve, including shifts in the age and gender composition of the labor force and changes in the amount of "churning" in the labor market. They find significant increases in matching efficiency, significant drops in labor force growth, and a decrease in labor force churning, the sum of which account for the inward shift in the Beveridge curve since 1987.
This paper investigates the main determinants of skill shortages. It draws upon a major, new government survey of over 4,000 establishments, Skill Needs in Britain, 1990. It matches on additional information from other sources to account for local labor market types and occupational effects. The analysis is based on the Heckman two-stage procedure, which is adopted in order to deal with the 'self-selection'of establishments into the shortage subsample. The results confirm earlier, more descriptive work, showing distinct differences in the influences on the 'spread'and 'intensity' measures of skill shortages. Copyright 1993 by Scottish Economic Society.
Extracting value from job vacancy information
- R Cárdenas
- Jeisson
Cárdenas R., Jeisson. (2020b). Extracting value from job vacancy information. Universidad del
Rosario. Working, paper No. WP2-2020-003.