Global Skill Shortages

Global Skill Shortages

Malcolm S. Cohen and Mahmood A. Zaidi

As the world entered the twenty-first century, global skill shortages in many occupations were evident throughout the world. While these were mitigated by a global recession, there is no generally agreed upon method for measuring these shortages. This book discusses various theories for measurement. Using data collected from 19 developed countries in North and Latin America, Europe, and the Pacific region, the authors explore various aspects of skilled labor shortages, develop a methodology of measuring shortages by occupation, and provide estimates of the likelihood of the occurrence of such shortages. They develop labor market indicators which measure the degree of shortage or surplus in different occupations.

Chapter 6: Factors Correlated with Shortages

Malcolm S. Cohen and Mahmood A. Zaidi

Subjects: business and management, human resource management, economics and finance, industrial organisation, social policy and sociology, labour policy


This chapter examines the factors that could explain shortages and labour surpluses. The relationship between the shortage indicators and other indicators in the 19 countries is analysed. While the emphasis is on the nine major occupational group indicators, some analysis is done for detailed occupations such as college and university professionals. FACTORS AFFECTING SHORTAGES In order to systematically measure differences across countries in institutions, policies, demographics and economic conditions, variables compiled by the Economist Intelligence Unit (Em)(2001) were used. They compiled hundreds of indicators for many countries including the 19 included in this study. The variables fall into six general categories: 1. Macroeconomic indicators 2. Demographics and health 3. Consumer markets and income 4. Infrastructure 5. Competitiveness 6 . Politics, institutions and regulations. Within each of these broad groups there are sub-groups and within each sub-group there are individual indicators. For example, within the group ‘politics, institutions and regulations’ there are seven sub-groups: 1. EIU business environment ratings 2. Private enterprise 3. Labour market 4. Tax regime 5. Financing 6. Foreign trade and exchange 7. Policy toward foreign investment. Within the sub-group ‘labour market’ there are five measures: 1. Industrial relations 2. Restrictiveness of labour laws 3. Wage regulation 4. Hiring of foreign nationals 5. Working days lost to strikes. 59 60 Global Skill Shortages Since the emphasis of this book is on the labour market, more attention was paid to labour market factors affecting shortages than to other factors. For example, consumer market and income factors (such as fish...

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