Despite economic cooling, skilled labor shortages remain a pressing structural challenge. In a recent analysis published by the German ifo Institute (ifo Schnelldienst 05/2026), IHS director Holger Bonin and researcher Eduard Storm highlight the paradox of concurrent underemployment in declining industries and severe staff shortages in future-oriented sectors.
The authors identify key levers to counter this misallocation, emphasizing proactive labor market policies through targeted retraining and measures to increase labor force participation (specifically among women, older workers, and migrants). Germany can learn from Austria that individual taxation of couples and couragoues restrictions on early retirment are politically feasible. Austria, in turn, can learn from Germany when it comes to needs-based childcare, a higher retirement age, and more liberal immigration laws, which are necessary for a more active integration policy.
Link to publication: ifo Institut: Anhaltende Fachkräfteengpässe