3 explanations for the labor shortage, according to Morgan Stanley

• There's a disconnect between open jobs and what workers want.
• Morgan Stanley says some temporary forces are holding them back, but there's also a bigger "mismatch."
• The big question is migration: how big and permanent it is, and what jobs will result.

You may have heard that there's a bit of a labor shortage.

It's unprecedented in its scale and mysterious in its origins. There has never been such a reluctance by the unemployed to go into open roles, as far back as labor-market data goes.

Wages are up, the number of people quitting their jobs is consistently near record highs, and there's more open roles than job seekers. Why do these gaps persist, with millions of Americans still unemployed?

The answer is more complicated than just pure numbers. In a Tuesday note, economists at Morgan Stanley led by Ellen Zentner laid out the three main factors creating a labor crunch.

(1) School closures are probably playing a role

A few of the circumstances currently holding workers back are set to clear up in the fall, as schools reopen fully and enhanced unemployment benefits wind down, Zentner's team says. Federal Reserve Governor Lael Brainard has also said that labor shortages should ease by the fall.

The Morgan Stanley economists cite a Federal Reserve analysis that found more people did not participate in the labor force due to caregiving responsibilities during the pandemic. In fact, "the decrease in participation for caregiving reasons accounts for all of the decline in participation for mothers."

Politicians and experts have identified childcare, or lack thereof, as a primary driver of current shortages. Schools reopening will offer more concrete, in-person options for parents - although experts say that moms may not return to work for months.

While preliminary findings have shown that ending enhanced unemployment early did not compel workers back, the left-leaning Century Foundation projects that 7.5 million workers are set to lose all benefits come September - likely hastening the need for those workers to seek out new roles.

A more sticky issue is the growing number of retirees over the age of 55. Morgan Stanley said labor force participation dropping among America's older workers "may be harder to reverse," with the number of retirements exceeding projections - and many of those recent retirees are over 65, meaning the likelihood of them returning is lower.

(2) A mismatch between the industries hiring and the workers seeking jobs

Morgan Stanley notes the uneven recovery among different industries, with job openings in some industries outpacing the number of workers who were initially laid off. That's true of manufacturing and professional services.

"Differences in skills and qualifications limit the extent to which workers can easily transition to high-demand industries, leading to a mismatch of labor supply and demand," Morgan Stanley writes. As Insider previously reported, mismatches across the economy - including both skills and expectations - have been fueling labor shortages during the pandemic recovery.

A survey of 1,800 workers by remote and flexible jobs site FlexJobs found that 48% were frustrated by their search, because they weren't finding the right positions.

(3) People moved during the pandemic - but many jobs didn't

A whole lot of people seized on the pandemic as an opportunity to leave behind the cities they lived in. Insider's Ben Winck and Hillary Hoffower recently chronicled the rise of the "exurb," rural areas on the fringe of later urban centers, where the commutes are weekly and not daily.

Morgan Stanley writes that areas like New York and San Francisco have seen "substantial population outflows" but have huge numbers of open positions for services jobs. At the same time, exurban areas have lots of openings for professional roles. Neither the cities nor the exurbs seem to have enough of the right type of worker. The migration will have to settle before these needs for workers are satisfied, and that could take a long time.

As the Morgan Stanley economists write: "After the 2008 financial crisis, regional misallocation of labor was one of the reasons that employment was slow to recover."