Skills obsolescence and technological progress: An empirical analysis of expected skill shortages

The combination of technological innovation with an ageing labor force makes skills obsolescence one of the main themes of current research in labor economics. Related to this issue, we study whether or not employers think their labor force is sufficiently equipped for future demands. For this purpose we use firm-level panel data for the Dutch economy. The results show that both the composition of the work force and firm-specific characteristics explain part of the observed differences between firms. Firms that use advanced technology and are product innovators have the highest probability of experiencing problems due to insufficient competences. The analysis of the dynamics of perceived competence problems shows that these are less likely to be persistent in technologically more advanced firms.