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View-false, The most common reason why companies stop hiring employees is because they cant find qualified job seekers. But new research shows that employers also stop hiring when they run into a shortage of qualified workers. The research, by the Kauffman Foundation and National Bureau of Economic Research, found that employers are more likely to cut back after reaching a shortage of workers, and to cut back sooner when they run into a surplus. We tend to think of a shortage of workers as an issue specific to a particular industry or geographic location, but we are suggesting that this may already be a more widespread trend, said Robert Hiltonsmith, founding director of the NBER. The research by the NBER and the Kauffman Foundation could have important implications for workers who worry that their employers may be cutting back on hours or other aspects of their jobs in an effort to reduce their labor costs. Hiltonsmith, who co-authored the study, said that this was the first analysis to show an association between employer reductions in workforce and a labor shortage. The research comes at a time when the economy is still struggling to regain its health. Economy, have been the single biggest factor in contributing to unemployment, according to the Census Bureau. Other recent research has found that the nations unemployment rate fell to 8. But economists expect that the labor market could still be tightening. The research was released as part of the foundations Hiring Our Heroes campaign, which focuses on ways the government can encourage companies and workers to hire and retain workers. The findings show the importance of encouraging companies to increase the number of workers in their payrolls, said Laura Fielding, president and CEO of the Kauffman Foundation. The research also shows that firms are more likely to cut back after reaching a labor shortage, rather than sooner, said Joseph LaVorgna, professor of economics at the University of Massachusetts Dartmouth who co-authored the study. Labor shortages happen when a pool of workers drops below a certain threshold. Because its difficult to know when a pool will be full, the researchers said employer behavior tends to be more unpredictable.

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