A Note on Estimating Unemployment By Education

In this paper we describe a range of methods for preparing forecasts of the educational profile of employment in the Irish economy. We use these forecasts to derive a profile of the possible evolution-specific unemployment rates in the next decade. Our results indicate the following: -Changes in the educational composition of the labour force alone imply, ceteris paribus, a fall in the overall unemployment rate of 4.5 percentage points by 2010 compared to 1996. -Underlying structural change in the economy, towards more skill-intensive sectors, is by itself driving an increase in the demand for skilled workers at the expense of unskilled workers. -Education-specific unemployment rates, for a given overall unemployment rate, are higher for unskilled workers than for skilled workers. -The most likely outcome for the next decade is an emerging shortage of skilled labour and surplus of unskilled labour. The demand for semi-skilled labour should remain strong.