Skill shortages and skill mismatch: A review of the literature

We review the recent economic literature on skill shortages and skill mismatch by paying particular attention to the demand side of skill mismatch, which have not received much attention in the relevant literature. We discuss measurement issues and how skill shortages and mismatch vary both with the business cycle and with structural factors. We review the economic costs for workers and firms and conclude by considering the policy implications, including how responsibilities for skill development can best be shared and what role policies can play to better address skill shortages and mismatches.