(Mis)match between Higher Education Supply and Labour Market Needs: Evidence from Portugal

Purpose: The purpose of this paper is to analyse whether there is an adjustment between the Portuguese higher education supply and the needs of the labour market. Design/methodology/approach: An empirical study is performed, using a quantitative approach, relating the job offers for graduates registered at the employment centres and the number of graduates by higher education institutions (HEIs) in Portugal, at an aggregate level and NUT II regions, by areas of education and training, over the 2003-2018 period. To understand how job offers and graduates are correlated, bilateral Spearman's rank correlation coefficients were calculated. Findings: The results show that, in large groups of educational areas, exists a match between the higher education supply and the labour market needs, with an emphasis on the fields of "social sciences, business and law", "engineering, manufacturing and construction" and "health and welfare". However, at a more disaggregated level, a mismatch in the sub-areas of "teacher training and education science" and "computing" was found since labour market needs are much greater than graduates by HEIs and the two variables are moving in opposite directions. Practical implications: The study has revealed important aspects that the educational policy should take into account in order to create the conditions for a gradual adjustment to the labour market needs. Also, the results demonstrate that some measures should be taken in short/medium term to avoid problems in the medium/long term. Originality/value: One implication of this empirical study was the elaboration of a correspondence table to standardise the data analysis units from two different sources. As this correspondence did not exist prior to this study, this output is a relevant contribution to the research field. Another important contribution is the demonstration of a mismatch in some educational sub-areas that deserves special attention from educational policymakers.