Scottish Government

Summary

• A number of commentators have noted that, relative to the rest of the UK, Scotland's workforce is relatively skilled - at least as reflected in the qualifications held by its workers. However, in contrast, productivity in Scotland remains below the UK average.
• One potential explanation for this relative under-performance given the strength of the skills base in Scotland is that the skills of the workforce are not being utilised effectively in jobs in Scotland.
• This report presents an analysis of the differences in the skills content of jobs between Scotland and the rest of the UK using data drawn from the 2006 Skills Survey. Using a very wide range of different measures of skills - including broad skills such as qualifications and training, computing skills, and generic skills such as communication and problem-solving - we investigate differences in the skills content of jobs between Scotland and the rest of the UK.
• The results reveal that, on average, jobs in Scotland are characterised by lower levels of skill content than in the rest of the UK across almost all measures of skills that are considered. While many of the differences are small in magnitude, there are some large negative differentials which are statistically robust. For example, respondents in Scotland report significantly lower usage of number skills and literacy skills than in the rest of the UK.
• Most notable is the significantly lower levels of computing skill content in jobs in Scotland. For example, as compared to the average UK worker, respondents in Scotland are:
  • 12% less likely to report that the use of computers is essential in their jobs;
  • 18% less likely to report that that they used computers in a complex or advanced manner; and
  • 13% less likely to say that the internet was important for their job.

These differences are large, and are statistically robust.

• One possible explanation is that jobs in Scotland are somehow different from the rest of the UK and, in particular, Scotland has a disproportionate share of jobs which use lower levels of skills. We therefore investigate whether differences in the industrial and/or occupational composition of jobs in Scotland can account for the overall lower average skills content.
• Our decomposition analysis reveals that this is not the case. Differences in the industrial and occupational composition of employment contribute very little to the observed negative differential in the skills content of jobs between Scotland and the rest of the UK. Rather, it is the lower skill content levels within both industries and occupations in Scotland that account for the overall negative differential. Thus, for example, jobs in Scotland use less computing skills on average not because there are fewer jobs in Scotland which are IT intensive, but because within all jobs, IT is used less intensively than in the rest of the UK.
• The use of computers, and IT more generally, is important for productivity. While we cannot draw causal inferences from the observed patterns, our results do suggest that at least part of the relative productivity gap between Scotland and the rest of the UK could be due to the lower skills content within jobs in Scotland, particularly computing and IT skills.