International Organization for Migration (IOM)

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1IntroductIon
Labour and skills shortages2 are expected to rise over the short to medium term in
the EU, as a result of demographic trends of shrinking workforce and of structural
changes in the distribution of occupations and in the nature of the skills in demand,
induced by an increasingly competitive global economic environment. After decades
of growth, the decline of the working-age population of the EU will start in 2013,
according to Eurostat demographic projections (EUROPOP, 2010), which indicate
a loss of more than 2.5 million in the working-age population of the EU27 in the
decade 2010–2020, and a four-time higher decline in the following decade. This
would result in a 12 per cent contraction of the EU working-age population by 2030.
As regards the skill composition of the EU workforce, the past decades have seen
significant upskilling, largely driven by the higher educational attainment of the
new entrants in the labour force compared with the retirees. However, recent
Organisation for Economic Co-operation and Development (OECD) analysis on
the demography of educational attainment (OECD, 2012a) indicates that over the
period 2010–2020 the share of highly educated workers among the older retiring
cohorts will be significantly higher than in previous decades, leading to much slower
increases in the size of the highly skilled labour force. In addition, according to
the latest CEDEFOP skills forecast (March 2012), in the decade 2010–2020 the
demand for highly skilled workers will grow at a faster pace compared with the
previous decade, as a result of continuing skill-intensive economic and technological
change. At the same time, growth rates by occupational skill level for the period
2000–2010 as identified by the OECD (OECD, 2012b), also point to an increasing
trend at the opposite extreme of the skill spectrum, with an average growth by 9
per cent in elementary occupations across OECD countries as compared with a 13
per cent increase in highly skilled jobs. The Talent Shortage Survey run in 2012
by Manpower Group among European Employers points to relevant shortages in
medium-skilled occupations.
Forecasted labour and skills shortages challenge the economic growth prospects of
the EU Member States and the potential for economic recovery. Faced with difficult-
2 A labour shortage occurs when there are generally too few people applying for vacant positions,
including entry-level positions or those requiring no specific type of skill. A skill shortage occurs
when there is a lack of candidates with the required education, experience or skills applying for jobs.
Often, labour and skills shortages coexist.
eXecutIve summAry – INTRODUCTION
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