Labour shortages: evidence and policy implications
Labour markets continue to perform strongly, with many countries seeing historically high levels of employment and low levels of unemployment. Labour and skill shortages rose in many countries in the past decade, labour market tightness is easing it still remains above pre-COVID-19 levels in many countries. In fact, labour shortages are still pervasive in several economic activities, as firms face recruitment difficulties which hamper their capacity to satisfy existing demand, to expand production, and to innovate. This situation can tamper productivity growth, aggravate supply bottlenecks, and eventually contribute to inflationary pressures.
Labour shortages are driven by cyclical factors, with the topical case of the demand spike in the aftermath of the pandemic (Causa et al, 2022), and by structural factors, in particular population ageing and the digital and green transitions (Dorville, Filippucci and Marcolin, 2024). The adoption and expansion of working from home and new hybrid working models may have accelerated associated imbalances between labour demand and labour supply. This is occurring at the same time as evidence points to a decline in firms’ investments in training, in a context of weak productivity growth (Andre and Gal, 2024).
Against this background, the Economics Department is organising a workshop to present recent OECD work in this area, addressing the topic from different angles. The main objectives of the workshop are: i) to take stock of the current and prospective situation of labour shortages and associated policy challenges, from the perspective of job attractiveness and job quality, along with skill needs in the light of structural transformations, e.g. demography, digital and green transitions; ii) to stimulate a policy discussion based on cross-country and country-specific analytical insights and experiences; and iii) to draw policy implications and areas for future research.
The workshop is organised in four sessions structured as follows: the first session sets the scene by presenting evidence and policy insights based on new ECO work (Causa et al., 2025) on labour shortages and labour market inequalities The second session provides a complementary view on labour shortages, building on recent work produced for the Global Forum on Productivity (GFP), focusing on the impact of structural trends such as digital and green transitions on labour demand, and associated skill mismatches
The third and fourth sessions explore the nature of labour shortages along two dimensions: i) a sectorspecific dimension, with a focus on major obstacles associated with attracting and retaining workers in healthcare, based on work by the Directorate of Employment, Labour and Social Affairs (DELSA), and ii) a country-specific dimension, with a focus on specific challenges and policy interventions to address labour shortages from the job quality angle, based on the experience of the United Kingdom Each session is followed by a Q&A and floor discussion between speakers and attendants
The workshop will be chaired by Douglas Sutherland, Head of the Public Policy Analysis Division in the Economics department.
AGENDA
Monday 17 February 2025
15:30-17:30, Room D/ZOOM
15:30 - 15:40 Introduction
Alain de Serres, Acting Director of the Policy and Research Branch, Economics Department
15:40 - 16:05 Labour shortages and labour market inequalities: evidence and policy implications
Presentation by Orsetta Causa and Emilia Soldani, Economics Department
16:05 - 16:30 All Hands on Deck! Do structural megatrends affect labour shortages?
Presentation by Luca Marcolin and Francesco Filippucci, Global Forum on Productivity, Economics Department
16:30 - 16:55 Health professional shortages in the OECD and the role of international migration
Presentation by Jean-Christophe Dumont and Gaetan Lafortune, Employment, Labour and Social Affairs Directorate
16:55 - 17:20 Country-specific experience and insights: presentation on “Diagnosing and addressing UK labour shortages” Presentation by
Paul Cheston, Head of Labour Market Branch - Labour Markets, Human Capital, Supply and Regions team
Will Cheeseman, Head of Economic Policy and AnalysisEducation and Skills team
Rob Hancock, Economic Adviser - Labour Markets and Distributional Analysis team
17:20 - 17:30 Concluding remarks
Asa Johansson, Deputy Director of the Policy and Research Branch, Economics Department