Friday, January 11, 2019

There is no skills gap, 2019 edition

...The theory here was that high unemployment reflected a structural shift in the labor market such that jobs were available, but workers simply didn’t have the right education or training for them. Harvard Business Review ran articles about this — including articles rebutting people who said the “skills gap” didn't exist — and big companies like Siemens ran paid sponsor content in the Atlantic explaining how to fix the skills gap. 
But nothing was really done to transform the American education system, and no enormous investment was made in retraining unemployed workers. And yet the unemployment rate kept steadily falling in 2013, 2014, 2015, and 2016 as continued low interest rates from the Federal Reserve let a demand-side recovery continue. Donald Trump became president, injected a bunch of new fiscal stimulus on both the spending and tax sides, and in 2017 and 2018 the unemployment rate kept falling and the labor force participation rate kept rising. 
Now along comes a new paper from Alicia Sasser Modestino, Daniel Shoag, and Joshua Ballance presented this week at the American Economics Association’s annual conference that shows the skeptics were right all along — employers responded to high unemployment by making their job descriptions more stringent. When unemployment went down thanks to the demand-side recovery, suddenly employers got more relaxed again....
You can read a draft copy of the paper here. (scroll down, PDF)

I think it would be interesting to see the written requirements for a principal scientist in medicinal chemistry at Merck or Pfizer over the last 15 years to see if the requirements did any significant shifting from 2003 to 2008 to 2013 to now. 

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