Global Skill Shortages
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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.
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Chapter 5: Shortage Indicators by Occupation and Country

Malcolm S. Cohen and Mahmood A. Zaidi


37 possible shortages will rise and fall as conditions change in each country. At any point in time countries are in different stages of the business cycle but indicators used for each occupation will reflect these differences. In previous work, Cohen ( 1995) used seven indicators to measure labour shortages in the United States. The other three indicators used in his work included replacement demand for labour, occupational employment forecasts and immigrants admitted in jobs for which United States workers could not be found.' Replacement demand is a measure of how many workers are hired to replace workers that leave the occupation. These indicators could not be replicated in other countries. By comparing the number of admitted workers to the size of the labour force in each occupation the immigration indicator was developed for the United States. More recently Cohen and Zaidi (1998) developed shortage indicators for the three North American Free Trade Agreement (NAFTA) countries, and also presented preliminary results for five countries (Cohen and Zaidi, 2000). Few countries collect data on vacancies. The United Kingdom collects data on job vacancies by occupation and the United States is planning to collect this type of data in the future. Some local United States state government agencies such as the Minnesota Department of Economic Security (2000) collect job vacancy data. While job vacancy data can be a useful measure of shortages of workers, they alone are not enough to determine if a shortage exists. A more complete analysis of labour market conditions...

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