The post-COVID-19 rise in labour shortages
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.
Published on July 15, 2022
In series:OECD Economics Department Working Papersview more titles