Students nearing the completion of teacher education programs in British Columbia’s universities reacted negatively to a recent announcement that the Vancouver School Board anticipates layoffs for some 800 teachers later this year.  Shortly after the announcement, CBC radio aired an interview with an SFU education student who described the situation as “nerve racking.” She said: “We’ve just started this program-where is this going to lead us, especially if they do not have a need for teachers.” (Tobin, 2010).  This gap between what human resources post-secondary institutions supply and the skills demanded by the labour market is a phenomenon that some regard as misalignment. 

Although governments typically seek education-to-labour market pipelines that are clear, direct, and unobstructed, there is a fundamental problem with the notion of alignment to which any recent journalism graduate can attest: we do not yet know now what the future needs of the labour market are. Most programs require between two and five years of study, but markets and the need for skilled labour can change quickly, as recent history has shown.

Attempts to align post-secondary education with the labour market are not new in Canada. The link, for technical occupations, can be traced to the Second World War and the establishment of the Vocational Coordination Act in 1942 and the Veterans Rehabilitation Act of 1945. These acts made provision for the technical training of personnel for the war effort and for post-war training of discharged soldiers. 

Post secondary education undoubtedly makes beneficial contributions to economic well-being through labour force preparation, but post-secondary institutions are unable to make rapid adjustments to market demands. Rapid adjustments would require the ability to accurately forecast labour market needs and translate these forecasts into post secondary education programs.

The accuracy of labour market forecasts is the first problem in this series, and has been the subject of much debate among economists. John Kenneth Galbraith once quipped that “the only function of economic forecasting is to make astrology look respectable.” 

There are two major approaches to occupational forecasting: workforce projection and labour market analysis (signaling). Workforce projection produces longer-term federal forecasts, while labour market analyses (LMA) identify and continually adjust to current regional and short-term trends.

Workforce projections are commonly used at the federal level to provide long-term estimates (Van Adams, Middleton & Ziderman, 1992). However, estimates are only as good as the “plausible assumptions” on which they are based. There are many unforeseeable factors that may affect the economic growth of a country (and the resulting labour market demands), the quality of forecasts tend to decrease as the length of the forecasting period increases (Campbell, 1997). Projections in terms of sectoral change, on the other hand, are often reasonably accurate. However, it is difficult to translate the resulting change in demand for skills into a profile that can be used to inform decisions about looming training and education requirements (Psacharopoulos, 1991).

Labour market analysis uses “signals” to forecast labour and education requirements. These signals are available in published job listings or from public employment insurance services that collect information about job openings, placements and unemployment rates. These resources provide a wealth of data which, if analyzed, may offer insight into current shortages or surpluses of workers. This approach can be limited by the fact that the data gathered from these sources are not generally available in a form that is amenable to analysis. Moreover, these sources are often incomplete since many jobs are not posted and many unemployed do not register with public services. Other types of signals include employer and household surveys, enrolment data and tracer studies, all of which tend to be restricted by region and population.

Our colleagues at the Canadian Council on Learning undertook a systematic review of the literature devoted to the topic of forecasting (Available at: www.ccl-cca.ca/CCL/Reports/SystematicReviews/SummaryReview3). They found the quality of the literature devoted to labour market forecasting is inconsistent. Those who would consider such information need to be proficient in econometric modeling and research design if they are to fully assess the value and the limitations of the available studies. They also found that forecasting research is very much source, location, and time specific; in other words, it is not clear if the models will perform as well in other forecasting horizons or contexts.

A poor track record of forecasts and the complex task of “tuning” the labour market (Heijke, 1996) have led to the view that labour market planning is neither necessary nor useful (Borghans & Willems, 1998). While it appears that some forecasting models have the ability to estimate labour needs in very specific circumstances, the consistency of the forecasts over different circumstances and time is uncertain. This makes close coupling of post secondary programs with labour market needs treacherous grounds for policy makers and institutions.  

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Borghans, L., & Willems, E. (1998). Interpreting gaps in manpower forecasting models. Labour, 12(4), 633-41.

Tobin, S. (Producer). Interview with Candace Mooney, as broadcasted in The Early Edition. (2010, January 20).CBC Radio One, Vancouver (690 AM/88.1 FM) online. Retrieved from: http://www.cbc.ca/mrl3/8752/earlier/tee/10-01-20.wma

Campbell, C. P. (1997). Workforce projection and forecasting approaches. Journal of European Industrial Training, 21(8/9), 281-283.

Heijke, H. (1996). Labour market information for educational investments. Retrieved 7/12, 2006, from http://www.roa.unimaas.nl/pdf%20publications/1996/roa-w-1996_2E.pdf

Psacharopoulos, G. (1991). From manpower planning to labour market analysis. International Labour Review, 130(4), 459-70.

Van Adams, A., & Others. (1992). Market-based manpower planning with labour market signals. International Labour Review, 131(3), 261-279.