What Is a Skill Shortage?

In 2004 NCVER invited proposals from a consortia of researchers to address questions relating to changing work skill needs and work organisation arrangements and their implications for the vocational education and training sector. The National Institute of Labour Studies, Flinders University, and the Centre for Post-compulsory Education and Lifelong Learning, University of Melbourne, were selected to undertake a body of work in among other areas, the nature of future labour supply, including changing demographics, work patterns and educational levels. This is the focus of this report. The report's purpose is to: (1) set out some clear thinking on the meaning of the term "skill shortage"; (2) identify circumstances under which shortages are resolved naturally by market forces; and (3) provide a guide for when a shortage warrants action from public-policy interventions to assist the market. The report does not attempt to quantify any overall or particular shortage of skills. The report is directed at policy-makers, employers, industry bodies and training providers interested in understanding the nature of skill shortages. Appended is: a list of Skills Consortium publications. (Contains 3 tables and 1 figure.) [This document was produced with funding provided through the Department of Education, Science and Training.]