How education matches occupation: modelling the structure of skill-job alignment

This study examines the relationship between educational attainment and occupations in Italy, focusing on how education aligns with job categories and how this relationship evolves over time. Using Labour Force Survey data, we construct education–occupation matrices for 2014, 2019, and 2024, providing a detailed view of changes in the joint distribution of workers across education and occupations. We introduce a theoretical model in which each education–occupation combination is treated as a labour sub-market, and employment levels result from equilibrium between labour supply and demand. The model provides a structural benchmark to assess whether observed changes can be explained by standard market mechanisms. Comparing observed and predicted matrices over the periods 2014–2019 and 2019–2024, we identify non-negligible deviations from benchmark-consistent reallocation. These deviations are interpreted as signals consistent with structural change in the labour market, potentially reflecting technological developments, institutional factors, or shifts in educational supply. The framework is intended as a diagnostic tool rather than a causal test: deviations between predicted and observed allocations signal unexplained reallocation patterns rather than provide direct evidence on specific underlying mechanisms.