Increasing Shortages of Skilled Workers – Why Are Rural Areas Particularly Affected?

Over the past decade, firms’ recruitment problems have increased significantly in Germany. We show that skill shortages have been more pronounced in rural areas and that the gap between rural and urban regions has slightly increased. The intensity of a local skill shortage is linked to regional labour market conditions, the occupational composition and the share of small establishments. However, the most important factor is a more advanced demographic change in rural areas. Of all factors considered, the proportion of older workers correlates most strongly with the regional vacancy rate.