Page 24 - Policy Economic Report - Feb 2026

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Lessons from Economics

Skill Imbalance Index

The International Monetary Fund (IMF) Skill Imbalance Index, released in January 2026, measures the
gap between the demand for new skills (often AI-related) and their supply, using the US as a benchmark.
It helps classify countries into those with high demand/low supply (needing training) or high supply/low
demand (needing innovation).

Key Aspects of the Skill Imbalance Index

• Purpose: The index assesses how effectively labour markets are adapting to new, especially AI-
driven, skills, which are reshaping employment and wages.

• Methodology: It compares the relative weight of potential new skill demand versus supply,
identifying, for example, that 1 in 10 job vacancies in advanced economies requires at least one
new skill, a rate twice that of emerging markets.

• Key Findings (2026):

o Leading Countries: Finland, Ireland, and Denmark are among the top countries positioned
to supply new skills due to high investment in education.

o Impact: The index helps identify countries that need to invest in STEM education (high
demand/low supply) versus those that need to encourage companies to absorb available
talent (high supply/low demand).

o Global Disparities: The index highlights significant cross-country differences, with
advanced economies facing different challenges compared to emerging markets. Many
northern and western European countries face relatively higher potential demand for
new skills but can also leverage relatively strong domestic supply of recent graduates with
the potential to provide relevant skills. On the other end of the spectrum, many emerging
economies exhibit both weaker potential demand and more limited supply, while
southern and eastern European economies fall somewhere in between

• Policy Implications: The tool aims to guide policy in bridging skill gaps, particularly as AI advances,
with recommendations focused on enhancing education and fostering innovation

Skill Readiness Index- To capture opportunities and quality of education that shapes a country’s ability to
supply new skill dimensions, a new Skill Readiness Index covering 24 countries is developed, combining: -

• the share of graduates able to supply new IT and non-IT skills,
• an indicator that measures the share of adults aged 25–65 who participated in job-related

learning, and
• workforce proficiency measured by the OEC ’s Programme for the International Assessment of

Adult Competencies literacy and numeracy scores.

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