What Drives the Vacancy Rate for Information Technology Workers?

This paper provides empirical evidence on both the magnitude and determinants of unfilled positions for information technology workers using cross-sectional data on 4150 German firms. Vacancies are defined as unfilled positions excluding those created by replacement needs during the first half of the year 2000. The share of vacancies created by replacement needs is only about 20 percent, indicating that high turnover rates are not the main reason for high vacancy rates. The adjusted job vacancy rate for ICT workers varies between 5.7 percent in the ICT sector and 6.7 percent in the non-ICT sector. The results of a generalized tobit model show that the adjusted vacancy rate mainly depends on the firm size, the share of ICT workers and actions taken in the past to solve the ICT worker shortage, but not on the diffusion of ICT. In the ICT sector, the decision made in the past to train apprentices in the new ICT occupations seems to have reduced the current vacancy rate. In the non-ICT sector, a successful strategy to solve the ICT worker shortage appears to be increased internal training. Finally, in the non-ICT sector, the common practice of completely outsourcing software programming significantly reduces the probability of vacancies.