Just can't get enough: more on skill-biassed change and labour market performance

It is common to hear the argument that poor labour market performance in OECD countries in recent years is the result of shifts in relative demand against less-skilled workers. But, there is much dispute about whether these trends have been occurring and, if they have, how important they are in quantitative terms. In part these problems come from the absence of a clear conceptual framework in which to think about these issues. In this paper we propose such a framework and a measure of skill mismatch that is independent of the definitions of skill, and demonstrate using data from a number of countries how it can be used to assess the importance in skill-biassed change in understanding labour market changes in recent years. Our findings suggest that while increased skill mismatch does seem to have occurred in the US and UK, it has not occurred in the other European countries in our sample.