The German Research Foundation (DFG) is funding a new research group to study workforce shortages and skill development. This initiative is part of the Berlin School of Economics (BSoE), bringing together experts from several top institutions, including Freie Universität Berlin, Humboldt-Universität zu Berlin, ESMT Berlin, the Hertie School, the University of Potsdam, Europa-Universität Viadrina, DIW Berlin, and WZB Berlin Social Science Center. The research group is based at Freie Universität Berlin.
The research group will focus on how labor market transformations affect workforce shortages and the skills required by employees. The team will examine new qualifications needed due to global changes, digital transformation, and shifts in labor demand.
“Workforce and labor shortages, along with continuous skill development, are major challenges for Germany and other developed economies,” says Prof. Dr. Peter Haan, the group's lead and professor at Freie Universität Berlin and head of the Public Economics Department at DIW Berlin. “We already see these issues today, and the upcoming retirement of the Baby Boomer generation will only make them more pressing.”
He adds that globalization and digital transformation are changing the types of skills in demand, with many workers currently lacking these qualifications. Key drivers of this shift include advancements in artificial intelligence and the transition to a greener economy. Policies like the EU Green Deal, which raises the costs of carbon-intensive products and processes, also impact labor demand and the skills needed in the workforce. “These effects are seen throughout the economy, as digital and environmental shifts touch nearly every sector. This creates a mismatch between the skills needed and those currently available,” Haan emphasizes.
The goal of the research group is to build a solid foundation for understanding these labor market transformations. They aim to produce clear evidence on the mechanisms and policy reforms that can reduce workforce shortages and improve employee qualifications. The group will explore a variety of policy areas, including education, immigration, female workforce participation, family policies, and pension systems, while considering their interactions. They will use a range of empirical methods, including microeconometric evaluations, field and survey experiments, and structural modeling, to conduct their analysis.
