Skill shortage
A shortage of skills is a source of aggravation to firms, and when acute, it is likely to hamper the quality and quantity of their output. The vocational education and training (VET) system plays an important role in assisting the matching of the skills required by employers to the skills offered by workers.
The VET system will be assisted in this task if: we can give a precise meaning to the term ‘shortage’; identify the circumstances under which any such shortage is likely to be naturally and efficiently resolved by market forces; and identify when direct policy intervention is required to assist the market. The VET system itself will be a part of any public policy response.
The article below aims to set out some clear thinking on each of these issues. It does not attempt to quantify any overall or particular shortage of skills.
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