C anadian labour markets resolve most skill shortages by themselves. Government intervention may be warranted in situations where labour market mechanisms are not effective.
Government attempts to alleviate severe skill shortages are hampered by inadequate information.
Those are the main conclusions of a recent study conducted by Harold Henson, Claude Lavoie and Richard Roy of the Applied Research Branch. Supply and demand for workers with specific qualifications fluctuates constantly. Fluctuations are caused by a wide variety of factors, including technological innovations, changing tastes of consumers and demographic patterns. These fluctuations, in turn, lead to imbalances in the various occupational markets because of adjustment costs, such as long-term labour contracts between workers and employees, time to set up job interviews, time to train new employees and acquire new equipment, legal fees in case of contested layoffs and lower employee morale following massive layoffs. In that context, it is not surprising to observe that, at any point in time, employers will report that jobs exist that are unfilled due to a lack of skilled workers.