Labour Shortages: some Limitations of Evidence from the Documented Labour Market

The levels of unemployment experienced in the last decade have served to concentrate attention on the operation of the labour market. A major concern of recent assessments of the British labour market has been the apparent persistence of labour shortages, particularly skill shortages. An additional concern has been the need to improve labour market information, particularly at the local labour market level. This article seeks to assess the appropriateness of this emphasis by analysing the meaning and performance of the various measures of pressure of demand available for local labour markets at the occupational level. The conclusion of the analysis is that all the commonly used indicators of the pressure of demand have severe theoretical and practical weaknesses and that extreme care needs to be taken in the use of published labour market data. Furthermore, knowledge is needed concerning the interrelationships between the documented and non‐documented labour markets.