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The post-COVID-19 rise in labour shortages

Author

Listed:
  • Orsetta Causa
  • Michael Abendschein
  • Nhung Luu
  • Emilia Soldani
  • Chiara Soriolo

Abstract

The labour market recovery from the COVID-19 pandemic has been strong among advanced countries, partly reflecting massive and unprecedented policy support to workers and firms. This paper provides evidence and stylised facts about labour market tightening and labour shortages since the onset of the pandemic. Labour shortages have been widespread across countries, yet particularly in Australia, Canada and the United States; and across industries, yet particularly in contact-intensive ones like accommodation and food, but also manufacturing. This picture is to a good extent driven by cyclical factors: in tight labour markets, workers are more likely to switch for better job opportunities. But this paper argues, based on illustrative evidence, that other factors beyond the economic cycle may also play a role: the post-COVID-19 increase in labour shortages may partly reflect structural changes, in particular changes in preferences, as some workers may no longer accept low-pay and poor or strenuous working conditions.

Suggested Citation

  • Orsetta Causa & Michael Abendschein & Nhung Luu & Emilia Soldani & Chiara Soriolo, 2022. "The post-COVID-19 rise in labour shortages," OECD Economics Department Working Papers 1721, OECD Publishing.
    • Handle: RePEc:oec:ecoaaa:1721-en
    DOI: 10.1787/e60c2d1c-en
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    More about this item

    Keywords

    great resignation; labour market recovery; labour shortages; policy analysis;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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