Large Portion Of Canadians Under-skilled, Over-skilled For Jobs: C.D. Howe Institute

September 10, 2019 – Large numbers of Canadian workers have skills mismatched to their jobs, and the problem looks set to worsen in face of technological changes and aging demographics, says a new report from the C.D. Howe Institute.

In “Bad Fits: The Causes, Extent and Costs of Job Skills Mismatch in Canada,” author Parisa Mahboubi notes about 13 percent of Canadian workers are either over- or under-skilled for their job in terms of literacy, numeracy and problem-solving, with about half fitting into each category.

The report notes significant variations across socioeconomic groups: while workers with higher educational attainment are more likely to be over-skilled, women, immigrants and older workers are more likely to be under-skilled for their jobs. However, the relative under-skilling problem among immigrants disappears with time spent in Canada, highlighting the importance of settlement policies that provide rigorous and accessible skills training, language programs, and job-search workshops for newcomers.

Despite this, the report indicates these results could worsen in the years ahead due to the dual pressures on the labour market of technological development and an aging population, which can increase the number of under-skilled individuals in the labour market.

“Development of skills enhances productivity and helps individuals to succeed in the labour market,” says Mahboubi. “However, the effective allocation of skills in an economy is necessary in order to achieve these laudable outcomes. Skills mismatch in terms of either over-skilling or under-skilling can have serious consequences on the economy’s performance and productivity. Although the incidence of skills mismatch might be temporary at the individual level in some cases, persistent skills mismatch that reflects inefficiency in the labour market can be costly for employers, workers and society, and needs to be addressed.”

The report puts the onus on government and business to tackle the skills mismatch problem, urging business to provide training opportunities for under-skilled workers and governments to champion policies that enhance labour market flexibility, ease labour mobility and increase participation in lifelong learning, particularly among older workers and new immigrants.

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For more information contact: Parisa Mahboubi, Senior Policy Analyst; or David Blackwood, Communications Officer, C.D. Howe Institute, phone 416-865-1904 ext. 9997, email: dblackwood@cdhowe.org

The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada's most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.