Is There A Skill Shortage in the US?
[We’re pleased to welcome Peter Cappelli of the Wharton School of the University of Pennsylvania. Peter recently published an article in ILR Review entitled “Skill Gaps, Skill Shortages, and Skill Mismatches: Evidence and Arguments for the United States” ]
Concerns over the supply of skills in the labor force, especially education-related skills, continue in the United States as well as in some other countries where employers complain about difficulty finding the talent they want. In the United States, there is little evidence consistent with the complaints about a skills shortage, and a wide range of evidence suggests the complaints are not warranted. Indeed, a reasonable conclusion is that over-education remains the persistent and even growing condition of the U.S. labor force with respect to skills. The best explanation for persistent employer complaints begins with a reminder that there is a market for labor regulated at least in part by supply and demand. Employers appear to be demanding more from applicants, most important, that they be able to perform jobs without any employer-provided training, and wages have not increased to match that greater demand. Employers and
especially their associations and consultants suggest some public policy response is in order to address employer complaints, but what that response should be is far from obvious.
The abstract:
Concerns over the supply of skills in the U.S. labor force, especially education-related skills, have exploded in recent years with a series of reports not only from employer-associated organizations but also from independent and even government sources making similar claims. These complaints about skills are driving much of the debate around labor force and education policy, yet they have not been examined carefully. In this article, the author assesses the range of these charges as well as other evidence about skills in the labor force. Very little evidence is consistent with the complaints about a skills shortage, and a wide range of evidence suggests the complaints are not warranted. Indeed, a reasonable conclusion is that overeducation remains the persistent and even growing condition of the U.S. labor force with respect to skills. The author considers three possible explanations for the employer complaints and the associated policy implications.
You can read “Skill Gaps, Skill Shortages, and Skill Mismatches: Evidence and Arguments for the United States” from ILR Review free for the next two weeks by clicking here. Want to know all about the latest research from ILR Review? Click here to sign up for e-alerts!
*Desk image credited to Nick Keppol (CC)
Peter Cappelli is the George W. Taylor Professor of Management at The Wharton School and Director of Wharton’s Center for Human Resources. He is also a Research Associate at the National Bureau of Economic Research in Cambridge, MA, served as Senior Advisor to the Kingdom of Bahrain for Employment Policy from 2003-2005, and since 2007 is a Distinguished Scholar of the Ministry of Manpower for Singapore. He has degrees in industrial relations from Cornell University and in labor economics from Oxford where he was a Fulbright Scholar. He was recently named by HR Magazine as one of the top 5 most influential thinkers in management and was elected a fellow of the National Academy of Human Resources. He received the 2009 PRO award from the International Association of Corporate and Professional Recruiters for contributions to human resources. He serves on Global Agenda Council on Employment for the World Economic Forum and a number of advisory boards.
