Mismatch in local labour markets in central Scotland: The neglected role of demand

This paper presents a model of mismatch unemployment in two local labour markets in Scotland. A total of seven possible sources of such unemployment are identified and examined within the context of a predominantly urban area and a mixed urban-rural area. These are contiguous travel-to-work-areas (TTWAs). The paper attempts to identify what causes recruitment difficulties and discusses the extent to which the problem is demand-induced. A survey of employer practices and attitudes is followed up by multiple regression analysis to determine the effect of these practices on vacancy duration. The analysis shows that there are certain recruitment practices and inherent characteristics of employers which result in job offers that are either unattractive or inaccessible to the unemployed. It is argued that design of policy for implementation at the local level needs to take account more explicitly of the demand side of the local labour market than has so far been evident in the UK approach to the skill mismatch issue.