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Alexander Burstedde / Regina Flake / Anika Jansen / Lydia Malin / Paula Risius / Susanne Seyda / Sebastian Schirner / Dirk Werner IW-Report No. 59 21. November 2020 Measuring the Shortage of Skilled Workers

The present IW-Report introduces a new methodology for measuring the shortage of skilled workers and thus makes a central contribution to mapping the skilled worker situation in Germany. First, a definition of the term "shortage of skilled workers" is presented. Afterwards, its operationalization is discussed.

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Measuring the Shortage of Skilled Workers
Alexander Burstedde / Regina Flake / Anika Jansen / Lydia Malin / Paula Risius / Susanne Seyda / Sebastian Schirner / Dirk Werner IW-Report No. 59 21. November 2020

Measuring the Shortage of Skilled Workers

IW Report

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The present IW-Report introduces a new methodology for measuring the shortage of skilled workers and thus makes a central contribution to mapping the skilled worker situation in Germany. First, a definition of the term "shortage of skilled workers" is presented. Afterwards, its operationalization is discussed.

The result is a comparison of labor supply and demand by using the unemployed as an indicator for unused labor supply and vacancies as unmet labor demand. For the concrete calculation of the key figures, the unemployment and job statistics of the Federal Employment Agency (BA) represent the central data basis, as these data are available in large case numbers and according to the 1.286 occupational categories of the Classification of Occupations of 2010 (KldB). The fine occupational differentiation is central to the significance of the results.

It is important to take into account differences in reporting behavior when reporting job vacancies from the BA job statistics. On the one hand, this concerns the particularities in the reporting behavior of companies providing temporary employment. Since there are indications of an over-reporting of real economic demand by temporary employment agencies in the BA job statistics, a weighting factor is introduced to correct this and prevent an over-reporting of labor demand.

On the other hand, there are differences in reporting behavior depending on the qualification level of the position to be filled. It is apparent that especially jobs for highly skilled workers are reported to the employment agencies less frequently than jobs for skilled workers who have completed formal vocational training. Reporting rates which differentiate between the four requirement levels of the KldB are known from the Job Vacancy Survey of the Institute for Employment Research (IAB) and can thus be used to extrapolate the demand for labor. In order to obtain an admissible extrapolation, this is carried out in a multi-step procedure so that methodological differences between the BA job statistics and the IAB Job Vacancy Survey are considered. The methodology presented leads to the fact that changes in the reporting rates are for the first time continuously taken into account when measuring the shortage of skilled workers.
 
The methodology presented in this report represents significant progress compared to the previous methodology for calculating skill shortages. In particular, it enables the shortages among academics with a master’s degree or comparable qualification to be better understood. At the same time, it reduces the risk of exaggerating shortages of skilled workers in areas where temporary work plays a major role.

Once this methodology has been implemented in the IW skilled workers database, central indicators such as the skilled workers gap, the job excess rate, the skill shortage ratio and the skill shortage quota can be calculated on an ongoing basis. While the skilled workers gap amounts to the number of vacancies without suitably qualified unemployed people, the job excess rate describes the share of open positions without suitably qualified unemployed persons out of all open positions. The skill shortage ratio describes the number of unemployed people per 100 vacancies, the skill shortage quota reports the proportion of vacancies registered in occupations with skill shortages, out of all vacancies. Results for the data status 30.06.2020 are presented.

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Measuring the Shortage of Skilled Workers
Alexander Burstedde / Regina Flake / Anika Jansen / Lydia Malin / Paula Risius / Susanne Seyda / Sebastian Schirner / Dirk Werner IW-Report No. 59 21. November 2020

Alexander Burstedde / Regina Flake / Anika Jansen / Lydia Malin / Paula Risius / Susanne Seyda / Sebastian Schirner / Dirk Werner: Die Messung des Fachkräftemangels

IW Report

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Alexander Burstedde / Ruth Maria Schüler IW-Trends No. 4 6. January 2021

Are Wages in Germany Responsive to Skilled Labor Shortages?

The demographic transition is confronting Germany with a growing shortage of skilled workers. In a simple, static labor market model, wages in occupations where the demand for labor is high should rise at an above-average rate to restore market equilibrium.

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