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Mismatch between Education and the Labour Market in the Netherlands: Is it a Reality or a Myth? – The Employers’ Perspective


Almost 50 percent of Dutch employers reported mismatch between skill demand and skill
supply in 1991. In 2011, this rate was only 25 percent. One potential explanation for this
decline is that employers benefitted from formal schooling trends that developed in response
to the increasing demand for higher-educated graduates. This hypothesis is tested in a twostep
empirical framework using data from the Dutch Labour Demand Panel that covers the
period between 1991 and 2011 and consists of 7,451 unique companies. First, we show that
an increase in formal schooling of the labour force with one month increases the schooling
level of the staff with almost 0.3 months. Second, we link these changes in the schooling level
of the staff, owing to a higher-educated labour force, with mismatch. The results indicate that
a one-month increase in the companies’ workforce average schooling level decreases the
probability that companies report mismatch with -2.7 percentage points.

Keywords: Education; Employer; Historical Trends; Mismatch; Skills

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