Investing in human capital in the era of European Universities: The uneven geography of skill mismatches across the regions of the European Reform University Alliance [version 2; peer review: 2 approved, 1 approved with reservations]

This paper examines the uneven geography of skill mismatches by studying the regional allocation of highly educated workers in high, medium or low skill-level occupations. To this end, a conceptual framework is developed combining Geographical Political Economy with theorizations around the optimal allocation of human capital. A comparative empirical analysis is then conducted using the Location Quotient Index for the period 2009-2021 for five countries (Greece, Bulgaria, France, Germany and Denmark), where the universities affiliated to the European Reform University Alliance (ERUA) are located. The results of this analysis are then contextualized through correlations with various macroeconomic, population density, and demographic metrics, which represent factors underlying the uneven geography of skill mismatches. The analysis stresses five critical factors behind the regional and occupational allocation of skills: economic dynamism at the national level, regional industrial specializations, urbanisation levels, demographic structures, and institutional endowments. Moreover, it is argued, these factors behind human capital development tend to reproduce geographical unevenness rather than ameliorating spatial inequalities. Based on these observations, a set of policy actions is recommended based on the five factors mentioned above and the EU’s New Skills Agenda. With the above, the paper offers valuable insight into the negative externalities associated with skills mismatches, taking into account the different socio-economic models and school-to-work transition systems across the EU. Moreover, it attempts to make a positive contribution to the European Universities Initiative, as examining the skills gaps in the regions associated with the ERUA strengthens the Alliance itself and helps to bridge existing inequalities.