Skill Shortages in Britain

This paper investigates the main determinants of skill shortages. It draws upon a major, new government survey of over 4, 000 establishments, Skill Needs in Britain, 1990. It matches on additional information from other sources to account for local labor market types and occupational effects. The analysis is based on the Heckman two-stage procedure, which is adopted in order to deal with the 'self-selection'of establishments into the shortage subsample. The results confirm earlier, more descriptive work, showing distinct differences in the influences on the 'spread'and 'intensity' measures of skill shortages.