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On the prevalence and intensity of labour shortages

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  • Frohm, Erik

Abstract

Survey-based indicators of labour shortages are often based on the number of respondents that experience a shortage – the prevalence – overlooking the crucial element of shortage intensity. Using data from a large representative business survey in Sweden, this paper constructs an establishment-level measure of labour shortage intensity, by considering the number of positions in shortage and total employment at the establishment. According to the data, the average intensity of labour shortages has decreased by 32% since 2007. A new aggregate indicator of relative labour shortages (RLS) that accounts for both the average intensity and prevalence of labour shortages indicated more subdued labour market conditions in Sweden during the recovery from the Great Recession and the COVID-19 pandemic than other indicators. Failing to account for the decline in the intensity of labour shortages mostly affects labour shortages in industry and less in services sectors.

Suggested Citation

  • Frohm, Erik, 2024. "On the prevalence and intensity of labour shortages," Economics Letters, Elsevier, vol. 244(C).
    • Handle: RePEc:eee:ecolet:v:244:y:2024:i:c:s0165176524004567
    DOI: 10.1016/j.econlet.2024.111972
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    References listed on IDEAS

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    5. Frohm, Erik, 2020. "Labor shortages and wage growth," Working Paper Series 394, Sveriges Riksbank (Central Bank of Sweden).
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    More about this item

    Keywords

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    JEL classification:

    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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