Skills Shortages in Post-transition Economies

Abstract

AbstractWhile post-transition societies have significantly changed their educational systems since the early phases of transition to accommodate labour market demand changes, the adaptation of human capital to labour market needs is seldom linear. Increased labour mobility associated with liberalization and EU accession, accompanied by globalization and the technological shift, have put the issue of skills shortages into the public spotlight. The present analysis sheds light on the perceived skills shortages by the firms in post-transition countries of Central and Eastern Europe. We propose a new indicator of perceived skills shortages, allowing us to capture more dimensions of the phenomenon and to assess the degree of the problem. We investigate the differences between the CEE countries in the most recent period. We also analyze factors affecting a firm’s perception of skills shortages. Our results suggest that innovators and large firms are significantly more likely to express skills shortages. Furthermore, we investigate the effect of perceived skilled shortages on firm productivity and find a negative correlation between the two variables.KeywordsSkills shortagesEnterprisesCEEPost-transition economies