Global Skill Shortages
Show Less

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.
Buy Book in Print
Show Summary Details

Chapter 2: Theoretical Aspects of Skill Shortages

Malcolm S. Cohen and Mahmood A. Zaidi

Extract

2. Theoretical aspects of skill shortages This chapter reviews some of the theoretical literature on skill shortages.’ It is important to point out at the outset that there is some discussion in the literature about the precise definition of skill shortages by occupation (Bosworth and Warren, 1992; Muysken, 1994). One of the main arguments here is that the term ‘shortage’ is imprecise. In a discussion of skill shortages one needs to consider skills as encompassing economic and institutional factors as well as innate abilities and personal characteristics. Booth and Snower (1996) blame the problem on insufficient incentives for people to acquire skills. Solow (1990) argues that the market clearing mechanism applied to labour markets has failed to explain the presence of unemployment. In other words, labour cannot be viewed as a commodity and labour markets do not behave in the same way as product markets. Furthermore, the traditional general equilibrium theory cannot easily justify the existence of skill shortages.2 This is not the place for an extensive discussion of general equilibrium theory as applied to labour market^.^ Our review is limited to a presentation of important concepts associated with static and dynamic skill shortages and explanations for the failure of labour markets to clear. The efficiency wage theory, the insider-utsider approach, barriers to mobility and the notion of path dependence are four concepts that provide explanations for the failure of labour markets to clear. STATIC SHORTAGES The existence of a skill shortage in a traditional and partial equilibrium framework can...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.


Further information

or login to access all content.