Employer Perceptions of Skill Deficiencies in the UK Labour Market: A Sub-Regional Analysis

Past research on labour market skill shortages indicates that whether respondents report skill shortages or hard-to-fill vacancies do so for widely different reasons. Nevertheless, there is some consensus that skill shortages analysis needs to examine such shortages within the context of the local labour market in order to understand the labour market dynamics and structural factors that affect the propensity for unemployed people to fill ‘skill shortage’ vacancies. The traditional approach has been to utilise qualitative analysis and case studies. This paper undertakes a multivariate logit analysis of employer perceptions of skill shortages utilising a sub-regional data set from a survey of Dorset employers undertaken in 1998. On a general level, the paper demonstrates the complexity involved in attempting to measure skill problems using the responses of employers to standard surveys. More specifically the results of the logit analysis find, amongst other findings, that: firm size is a significant determinant in skill deficiency perception, that growing firms have a higher skill shortage perception and that it is important to include respondent characteristics when analysing employer perceptions of skill deficiencies. JEL Classification: J240, Skill Shortages, Employer Perceptions, Logit Analysis. Lecturer in Economics, Department of Economics, James Callaghan Building, University of Wales Swansea, Singleton Park, Swansea, UK, SA2 8PP. Policy Research Institute, Leeds Metropolitan University, Bronte Hall, Beckett Park Campus, Leeds LS6 3QS, Corresponding author: Division of Risk, Glasgow Caledonian Business School, Cowcaddens Road, Glasgow, G4 0BA. The authors would like to thank Louise Parker and Matthias Beck for helpful comments on earlier drafts. The usual disclaimer applies. Employer Perceptions of Skill Deficiencies in the UK Labour Market: A Sub-Regional Analysis