Labour Skills Mismatch In Urban Ghana

ABSTRACT The expected harmony in terms of forward and backward linkages between education, skills and labour market outcomes has been met with frictions and imperfections that raises questions about the market relevance of acquired education and skills relative to industry requirements. The phenomenon of skills mismatch thus remains crucial for developing economies like Ghana considering colossal investment in education and skill development. This study, therefore, attempts to provide a comprehensive analysis of the skills mismatch phenomenon in urban Ghana, with specific emphasis on the causal triggers, effects on post-hire outcomes and a critical examination of skills and personal portfolio required by industry players and firms in Ghana. It is structured into seven chapters with three distinct but interrelated empirical papers that examine the core issues of mismatch. The first empirical paper, contained in Chapter Four, focuses on the “Determinants of Labour Skills Mismatch in Urban Ghana”. Drawing on a cross-sectional data from the 2013 World Bank Skills Toward Employment and Productivity (STEP) survey, the study employs the method of multinomial logit to primarily ascertain the set of factors that predisposes urban Ghanaian workers to being over or undereducated relative to being adequately matched to their jobs in terms of formal education. The study identifies sex, marital status, education, skills, occupation and time to proficiency as significant determinants of mismatch. Women are found to have a higher likelihood of overeducation but lower propensities to be undereducated relative to men. Education consistently and significantly increases the likelihood of overeducation with or without the presence of controls, but reduces the likelihood of being undereducated. In terms of vi skill specificity, computer skills usage robustly explains overeducation albeit its impotency on undereducation for medium and high skill urban users.