Demand for skills falling?
Re-posted from Economist’s View, Mark Thoma points to Arnold Kling ‘Is the Demand for Skill Falling?’ who points to this this NBER paper:
Is the Demand for Skill Falling?, by Arnold Kling: Paul Beaudry, David A. Green, and Benjamin M. Sand have a paper with an intriguing abstract, which says in part,
Many researchers have documented a strong, ongoing increase in the demand for skills in the decades leading up to 2000. In this paper, we document a decline in that demand in the years since 2000, even as the supply of high education workers continues to grow. We go on to show that, in response to this demand reversal, high-skilled workers have moved down the occupational ladder and have begun to perform jobs traditionally performed by lower-skilled workers. This de-skilling process, in turn, results in high-skilled workers pushing low-skilled workers even further down the occupational ladder and, to some degree, out of the labor force all together.
If true, this would upset nearly everyone’s narrative apple cart, including mine.
this table from the BLS has been posted before:
The 30 occupations with the largest projected employment growth, 2010-20
other than nurses and teachers, most of the top ten dont even require a high school diploma..
I posed the following at EV:
“More importantly, we are arguing that relative to the 1990s, it is a future where even the demand for skilled workers is reduced. In this maturity stage, having a BA is less about obtaining access to high paying managerial and technology jobs and more about beating out less educated workers for the Barista or clerical job.”
Like some of the other criticisms about the paper, I struggle with some of the authors’ working definitions. For instance, from the above text, it would appear that in their model a college degree is fungible, making no distinction between type of degree and institution it was earned. Let’s face it, a degree in Eastern Religions from Southeastern ____________ State is not likely going to draw the job recruiters.
My question is would these findings suggest that at least some of the unemployment is frictional, and if the downward shift on the professional ladder for highly skilled/educated workers is in fact permanent, we should see a decrease in that frictional unemployment as the reality of the shift being permanent is grasped by many in the labor market?
I believe this finding is just another piece of evidence of what happens when you move manufacturing away from the consumer. Innovation is stymied and the culture of the market/consumer become homogenized thus no evolution.
This is the results of the major market players (both finance and production) simply collecting rents. You only need a limited number of skilled people in a very narrow field of skills to count your money.
As to frictional unemployment, I would think the amount of friction is now dependent on what end of the skill set or sets one is charting.
i think something else is at work.
at one time a “programmer” was a person with a certain amount of talent for getting a dumb machine to do what people needed done.
he may not have had a degree, but he could demand relatively high wages.
then they found they could “educate” a large number of “programmers” with no special talent, but a sufficient bag of tricks to get a well defined job done for the narrow purposes of people with money. these people required a “degree” but no special skills.
and now we have found that a few “programs” can replace many “programmers”, who in spite of their degrees can no longer find jobs at any wages.
i think this is the general drift in all occupations. including ph.d. “scientists.”
I see people writing columns on this, ignoring the fact that the economy stinks. I imagine that the same factor was present the Great Depression – toll edge grads doing HS grad work, etc.