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Adapting the Demand for Training Knowledge Workers in Local Labor Markets

This research was done within the framework of Pick-Me project – WP 6. In this study data gathered in an Israel Central Bureau of Statistics survey among more than 5,000 Israeli university and colleage graduates were analyzed. The survey examined the extent of the graduates’ integration into the labor market.

 The research studied the existence of match (or lack of it) between the education graduates acquired and the labor market requirements in the context of the gap between central Israel and the peripheral regions. With the aid of statistical modeling and simulations, the contribution of an innovative environment was estimated, along with other regional and individual characteristics, to the match between graduates’ training and labor market needs.  The results of the research indicated that the likelihood the graduates’ education was compatible with the demands of the labor market are higher, among graduates of the exact sciences and engineering, than the graduates of the social sciences and humanities programs. And for exact sciences and engineering, the likelihood of a good match between training and labor market demands is higher for graduates of universities than the graduates of colleges. The findings of the research indicate that there is a lack of compatibility between the supply of university and college graduates in the peripheral regions and the demand for such graduates in local labor markets. The results of the simulation stressed the crucial importance of an innovative environment and its contribution to the wellbeing of the region. At the same time, it is important to recognize that creating an innovative environment is a gradual process that is mainly demand driven. Such environments tend to thrive and develop in core regions or large urban areas characterized by economic agglomerations and plentiful production resources. Thus, in peripheral regions, demand-driven enterprises alone cannot shrink the lack of compatibility between higher education and market demands. Reducing this incompatibility is essential to diminish the out-migration of educated persons from the peripheral regions. In parallel, measures must be taken, on the supply side, in which local government authorities play a key role in ensuring the necessary conditions for adapting labor market demands to the education of academic institutions in these peripheral regions.