Skills at Work: How skills and their use matter in the labour market

Human capital is key for economic growth. Not only is it linked to aggregate economic performance but also to each individual’s labour market outcomes. However, a skilled population is not enough to achieve high and inclusive growth, as skills need to be put into productive use at work. Thanks to the availability of measures of both the proficiency and the use of numerous types of skills, the Survey of Adult Skills offers a unique opportunity to advance knowledge in this area and this paper presents and discusses evidence on both these dimensions with a particular focus on their implications for labour market policy. This paper explores the role played in the labour market by skill proficiency in the areas of literacy, numeracy and problem solving in technology-rich environments. It also shows how skills use, not only proficiency, affects a number of key labour market phenomena, such as the gender wage gap. Finally, the paper combines information on skill proficiency, educational attainment, skill use and qualification requirements to construct indicators of qualification and skills mismatch and to explore their causes and consequences.