Labour and skill shortages in Malta – Have these been affected by the COVID-19 pandemic?

Despite the very strong rise in the supply of labour and increase in participation rates over the last 15 years, labour shortages have emerged as one of the most pressing concerns for Maltese firms. Several indicators of labour and skill shortages indicate that such concerns have become more acute over time. These observations do not seem to have changed or have become exacerbated by the pandemic. Indeed, despite the heterogeneous impact of the pandemic on the different economic sectors, sectoral labour reallocation has been rather limited, especially when compared with other recovery periods that followed a recession. Moreover, employment rates have exceeded those which prevailed prior to the pandemic, and job flows have stabilised to those seen in 2019. Within this context, policy should emphasise more strongly the need to enhance productivity, in part by redirecting labour market policy to address skill shortages especially for highly specialised skills.