The objective of a skills system is not only to continually develop the skills of the population, but also to activate and effectively match these skills to the needs of employers in the labour market. Cedefop's European Skills Index (ESI) is a composite indicator that measures the performance of a country’s skills system. ESI monitors member states performance over time and identifies areas calling for improvement. ESI can assist the implementation of the European Pillar of Social Rights.
The European Skills Index is comprised of three pillars, each of which measures a different aspect of a country's skills formation and matching system; these pillars are used to organise and aggregate 15 individual indicators into a single summary measure.
Skills Activation includes indicators of the transition from education to work, together with labour market activity rates for different groups of the population, to identify those which have a greater or lesser representation in the labour market.
Skills Development represents the training and education activities of the country and the immediate outputs of that system in terms of the skills developed and attained. Sub-pillars are included to distinguish compulsory education, and other education and training (lifelong learning activities). The potential workforce of a country is determined not only by the development of skills in the population, but also by the activation (or participation) of skills in the labour market.
Skills Matching represents the degree of successful utilisation of skills, the extent to which skills are effectively matched in the labour market. This can be observed in the form of jobs and mismatches which include unemployment, shortages, surpluses or underutilisation of skills in the labour market. Sub-pillars are included to distinguish unemployment and skills mismatches.
The 2020 technical report on Cedefop European Skills Index is available here