ABSTRACT
The origin of this chapter goes back to advisory work on labour markets and manpower planning in the 1980s in several countries. 1 While these manpower planning assignments have had an impact on decisions of the responsible ministries in various ways, it became also increasingly recognised that it is very difficult to forecast the future in with regard to the labour market due to untraceable interactions that take place between ex ante states (expectations of skills demanders, that is, employing firms; and expectations of skills suppliers) and ex post states (realisations of employment and unemployment). The tasks are made more difficult due to the absence of an analytical framework that could separate the ex ante from the ex post state of the labour market; besides, there are no data for tracing the adjustment processes between these two states. The supplementation of forecasting models of labour demand and supply by subsequent modelling of adjustment processes and the clearance of labour markets presented themselves as challenges that require resolution, testing, and applied use. The challenges were relevant from the viewpoints of both academic inquiry and policy-making concerns. The objective of this chapter is to present a modelling framework that incorporates these challenges and remedies to them, show how these remedies work, and investigate results and implications in the context of three countries: Colombia, Korea, and Pakistan.
