There will be an urgent demand in the years ahead for less qualified workers, according to the director general of FAS, Mr John Lynch.

He said that, contrary to "generally accepted opinion", the increase in education participation would mean that, at entry level, there would a "tightness emerging in the labour market" for people with low skills.

He said there would be a decline in the youth labour force as participation in education increases.

This would leave fewer entering the labour market directly with leaving certificate or lower qualifications.

One way to address this shortage, he suggested, would be to develop a flexible national system of trainee-ships for semi-skilled jobs.

"For its part, the Government will have to take action, in part this will come in the form of continued efforts to reduce the tax/welfare wedge."

Mr Lynch was speaking in Dublin at the launch of a campaign to promote careers and training in the engineering sector.

He stated that the growth of post-leaving certificate education and training suggested the State could be confident of meeting "medium-term demand for higher-level skills, although there will be a need for fine tuning from time to time".

He added that another way of dealing with shortages - bringing in older women from outside the workforce - might already be limited. He noted that the participation rate of women in the Irish labour force was fast approaching the EU average.

"Further increases may become more difficult to achieve when this catching up process is complete," he added.