Sustainable labour market integration of migrants: Drivers of skills mismatch and skills matching policies and initiatives

Despite existing labour shortages, many migrants in Austria work below their level of qualification. This so-called skills mismatch represents a key challenge for the sustainable labour market integration of migrants and at the same time has negative effects on the economy. Thus, one in three people (around 39%) in Austria aged between 25 and 64 with a higher education degree or advanced vocational qualification from a non-EU country is employed in a job that does not require higher qualifications. While the Austrian labour market is in need of skilled workers, existing qualifications are therefore not being sufficiently utilized.

Against this background, this study examines skills mismatch – the phenomenon whereby an individual’s qualifications and skills do not match the requirements of their job – with a particular focus on migrants. The study analyzes the causes of skills mismatch and identifies existing policies and initiatives in Austria aimed at promoting skills-appropriate employment among migrants.

The findings show that systemic factors, employer practices, and individual circumstances of migrants contribute to skills mismatch. These include, among others, language barriers, complex and costly recognition procedures, regional mismatches between labour demand and migrants’ places of residence, financial pressure, and limited access to information and networks. As the findings indicate, many of these factors have a gender dimension, meaning that women are more frequently affected by skills mismatch.

Existing measures predominantly focus on supporting employees, while measures targeting employers and creating incentives for skills-appropriate employment have so far played a subordinate role. This publication provides an evidence-based foundation for policymakers and practitioners to further develop strategies to address skills mismatch in Austria.