Background of the Study

In the highly-competitive labor market, getting a degree is no longer an assurance to

landing a job, especially with high rates of unemployment and underemployment staining the

economic landscape.While thousands of jobs are being generated to mitigate this problem, there

is a parallel issue in the form of a mismatch between business demands and existing talent pool.

According to the January 2014 Labor Force Survey, the Philippines registered an unemployment

rate of 7.5 percent, while underemployment was pegged at 19.5 percent. The Global

Employment Trends report of the International Labor Organization published in 2014 also

revealed that the Philippines registered an unemployment rate of 7.3 percent in 2013, the highest

unemployment rate among members the Association of South East Asian Nations or ASEAN. In

order to know if an employee is on mismatch of his/her job, the researcher creates five

dimensions: Skills, self-efficacy, economy, experience and time management.

Skills

Skill mismatch is one of the main challenges faced by economies. Empirical evidence

shows that, in far too many cases, workers are not well-matched with their current jobs. Some

are over-skilled for their current jobs they are capable of handling more complex tasks and

their skills are underused while others are under-skilled for their current jobs they lack the

skills normally needed for their job.

Skills mismatch on the job can be a temporary phenomenon: sometimes, for example, the

demand for skills takes time to adjust to the fact that there is a larger pool of highly skilled

workers available. At the same time, the mismatch between workers skills and their tasks at

work can also adversely affect economic and social outcomes. Over-skilling can be a problem
because it may lead to skills loss and a waste of the resources that were used to acquire these

skills. In addition, over-skilled workers earn less than workers who are well-matched to their

jobs and tend to be less satisfied at work. This situation generates more employee turnover,

which is likely to affect a firms productivity. Under-skilling is also likely to affect productivity

and slow the rate at which more efficient technologies and approaches to work can be adopted.

Skills policies should support employers in making better use of the skills available to

them. Mechanisms that help managers, particularly in small and medium-sized enterprises

(SMEs), to identify effective work and organisational practices should be emphasised. These

include promoting innovation and adopting technologies and practices that make the best use of

the existing skills base.

Offering relevant adult education and employer-provided training can also help tackle

skills mismatch, especially under-skilling. Many studies show that training can be

complementary to changing demands for skills. The incidence of mismatch can be reduced

through better management and more transparent information.

There are several ways to measure skills match/mismatch. Most of the academic and

policy analyses on mismatch to date have focused on qualification rather than skills because of

data availability. Some analyses use indirect measures of skills mismatch, but few have been

based on direct measures. The Programme for the International Adult Assessment of Adult

Competencies (PIAAC) will change this situation, as it will provide direct measurement of skills,

as well as measures of the use of those skills at work.

Work Self-Efficacy

Self-efficacy, in general, refers to ones confidence in executing courses of action in

managing a wide array of situations; work self-efficacy assesses workers confidence in

managing workplace experiences (especially for new or prospective workers). The theoretical

underpinning is that individuals with higher work self-efficacy are more likely to look forward

to, and to be successful in, workplace performance. Furthermore, work accomplishments are

believed, in turn, to increases self-efficacy through a feedback loop tying subsequent

performance to augmented self-efficacy beliefs.

Economy

The 2006 Survey of Labour and Income Dynamics indicates that 58% of the workers age 25 to

54 with a postsecondary certificate or degree considered their job and education to be closely

related; 19% said that the relationship between the two was somewhat related; and 23% did not

think there was any relationship at all between their job and education.

The mean wage rates for those in the closely related category and the somewhat-related category

were similar: $28 and $26, respectively. However, they were higher than the $20 mean wage rate

for the not-at all related group. The wage gap between the closely related group and the not-at-all

related group was larger at higher levels of education.

Models that accounted for many factors related to wages such as demographic and

geographic attributes and occupational characteristics validated the positive return to working at

a job closely related to ones education, although the magnitude of the return varies between men

and women, and by type and level of postsecondary education. The reward for working in a job
closely related to ones education is greater for university graduates than non-university

postsecondary graduates.

For male university graduates above the bachelors level, the estimated wage difference

between the closely related group and the not-at-all related group is over 40%. Among women

with the same level of education, the estimated wage rates of these two categories are not

significantly different. This is likely due to a high incidence (about 95%) of finding a job in the

closely related or somewhat-related categories among these women, leaving an imprecisely

measured reference group.

For male university graduates with a bachelors degree or below, holding a job that is at

least somewhat related to ones education increases wages by at least 27%. For women with the

same level of education, finding a job that is closely related to ones education boosts wages by

24%.

A previous study found that postsecondary graduates ranked high pay as their number-

one criterion for selecting a job (Clark 1999). The current study indicates that the opportunity for

higher wages is likely to be maximized in a job that is closely related to ones field of study. The

magnitude and breadth of these results is such that there may be positive macro-economic returns

to improved matching of graduates to jobs.

Although close to one-quarter of the graduates worked in a job that was not-at-all related

to their field of study, it might be possible that some people take on a position that is entirely

unrelated to their field of study voluntarily. Robst (2007b), looking at reasons for not having a

job related to ones education, found that mismatch associated with pay and promotion

opportunities and change in career interests actually had a positive effect on earnings. Other
reasons such as working conditions, job location, family-related matters and no available job in

the highest degree field would reduce wages. While pay is the primary motivator, other factors

may be involved: individuals working in an unrelated field could be trading off higher wages for

other preferences.

Experience and time management

Work experience can get you started in your career, as well as helping you to pin down

what you want to do. Work experience is important whether you want to stay on in education or

get a job. It shows people that youve thought about what you want to do and that you have a

realistic idea of what working life is like. The more experience you can get before you apply for

your first full-time job, the better.

It will also give you a good opportunity to gain useful skills and experience working with

a range of people from all sorts of different backgrounds. Time management is also sometimes

referred to as self-management or independent working. It is particularly important for

graduate jobs because you are likely to be given greater levels of responsibility. You are more

than likely to have several different tasks at once, and in order to do your job successfully you

will need to be able to coordinate them.

You will need to work to several different deadlines, as well as accommodating other

work that you may receive. To manage time effectively you need to be able to prioritize and

make judgments about what is urgent and what is important. For the period 2001-03, the

Philippines received its share of debilitating events both local and international. In the local

front, widespread poverty, high unemployment and underemployment, weak external demand,

threats of terrorists attacks, political scandals and coup attempts continued to pervade the
Philippine society. Meanwhile, the 11 September 2001 tragedy, global recession, Iraq war and

the SARs epidemic have likewise done its share of damages. Despite of these, the Philippine

economy (GDP) was able to grow at a modest rate of 4.0 percent during the period.

The growth, however, did not usher ample employment opportunities. In fact, for the last three

years, unemployment rate remained at 11.4 percent.

Labor Force. The countrys labor force for the period 2001-03 has expanded by 5.34

percent or roughly 1.752 million, increasing from 32.808 million in 2001 to 34.560 million in

2003. Employment. During the three-year period, the annual employment growth rates were on

a downtrend from 6.2 percent in 2001, it went down to 3.1 percent in 2002, and down further

to 1.9 percent in 2003. The rise and fall in employment were observed to beclosely tied to the

fluctuation in agricultural employment. In terms of level, employment generally increased from

29.157 million in 2001 to 30.628 million in 2003. This corresponds to an annual average growth

rate of 3.7 percent or an annual increment of 1.058 million a year. Considering that the labor

force has been growing at an annual rate of 3.8 percent or 1.207 million each year, this is barely

sufficient to employ new entrants on top of the existing pool of unemployed. By demographic

characteristics, nearly two-thirds of the employed are male (61.2%), and majority of the

workforce belongs to age group 25-54 years old. Moreover, a sizeable chunk of the employed

had at least attended high school or reached college (60.7%). The service sector remained at the

helm, accounting for 47 percent of the total employment, and has been growing at a rate of 4.3

percent. Because of the ease of entry in the sector, it has served as a catch basin for those who

cannot find employment elsewhere. Meanwhile, the combined agriculture, fishery and forestry

sector constituted 37 percent of the overall employment. Industrial employment, on the other

hand, continued to stagnate as its employment share was standstill at 15-16 percent.
Employment in the Philippines is largely labor-supply driven as persons who cannot find jobs in

the formal labor market ends up creating their own employment. This explains the considerable

share of own-account (37.6%) and unpaid family (12.9%) workers. Meanwhile, wage

employment accounted close to 50 percent of overall employment.

By hours of work, part-time employment has been growing at a rate of 6.7 percent yearly

compared to a slower rate of growth of full-time employment (2.2%). The significant changes in

the production structure in recent years have to a large extent altered the employment

arrangements paving for the proliferation of flexible forms of employment. This phenomenon

has partly contributed to the growth of part-time employment.

By occupational desegregation, nearly one-third (29.7%) of the total employed were laborers and

unskilled workers followed by farmers, forestry workers and fishermen (21%), trade and related

workers (10%), civil servants (10.4%), service workers and shop and sales workers (9.2%), plant

and machine operators and assemblers (7.6%), and 5 professionals and technicians and associate

professionals (7.2%). Underemployment is considered a more serious problem than

unemployment in the Philippines since it cuts across age groups, and its magnitude is twice as

that of unemployment. For the last three years, underemployment rate was almost in a standstill

of 17 percent. In absolute terms, however, it registered an increase of 200,000, from 5.0 million

in 2001 to 5.2 million in 2003. Underemployment in the Philippines is more of a rural

phenomenon.

The high trend in the incidence of unemployment can be attributed to the faster growth of

the labor force vis--vis growth in employment opportunities. For the last three years, the rate of

unemployment remained at a double-digit level 11.2 percent in 2001, 11.4 percent in 2002, and
11.4 percent in 2003. The unemployed were mostly male comprising slightly more than one-half

of total unemployed (59.4%). Meanwhile, unemployment in the Philippines is more of an urban

phenomenon roughly two in every three unemployed were urban residents. It also largely

problems of young unskilled and inexperienced labor force. The youth3/ (48.7%) accounts for

almost half of the total unemployed. Their rate is the highest across age groups, and is more than

twice the national unemployment rate (23.8% vs. 11.1% in 2001, 22.9% vs. 11.4% in 2002, and

23.3% vs. 11.4% in 2003). Most of them were school leavers. Majority of the unemployed were

relatively educated mostly comprised of those who have at least high school (42.7%) and college

education (34.3%). This trend affirmed the persistence of educated unemployed.

Moreover, only one-third of the unemployed actively looked for work while the

remaining two-thirds did not look for work due to various reasons such as the belief that no work

was available, ill/sick, bad weather, waiting for job recall, to mention some. A major component

of the Philippine employment program is overseas employment. For the past three years, an

annual average of 875,000 Filipino workers were deployed to work abroad. Almost a quarter of

them were sea-based. The evidence of skills mismatch can therefore be observed through the

existence of a large number of educated unemployed and the widespread dissatisfaction among

employed workers as indicated by the double-digit underemployment rate. The large population

of Filipinos working abroad, on the other hand, mirrors both the lack and diminishing quality of

employment opportunities in the country.