Spanish labour market, mobility and labour shortages

<jats:title>Abstract</jats:title> <jats:p>We use a simple yet powerful approach to investigate the dynamics of worker flows across sectors in the Spanish economy. The method imposes a minimal amount of structure on the data by assuming sector-specific matching functions, and backs out the direction of workers’ search intensities across sectors using data on realised worker flows and vacancies. We find that aggregate search intensity in Spain has been increasing since the pandemic and has led aggregate labour shortages to be below pre-pandemic levels by 2023. However, this boost of search intensity is directed to industries with low matching efficiencies and job finding rates. As a result, aggregate match formation is near to a 10-years low relative to the number of matches that would result if search intensity was allocated to maximise total matches given the observed vacancy distribution and match efficiencies across sectors.</jats:p>