Build It and They Will Come? US Regional Labor Composition and Readiness to Meet Skill Demand Shocks from CHIPS and Science

Abstract

The CHIPS and Science Act has led to the announcement of at least 55,116 jobs in the Semiconductors and Electronics industry, representing a significant demand shock, often in regions without an incumbent semiconductor workforce. Many workers entering these roles, such as semiconductor processing technicians, will need to come from occupations that only partially match the skills required by the new demand for semiconductor production. We present an analytical methodology to quantify the potential stock and flow of talent from these partially matched occupations, to support a boundary analysis of labor market readiness to meet new demand. Our methods serve as a `what-if analysis tool,' providing policymakers with actionable insights into workforce readiness and skill alignment under various hypothetical scenarios. This methodology, informed by operations research and economics, estimates potential supply-demand skill gaps, and incorporates factors such as intertemporal occupational rates of transition and regional wage distributions to estimate the potential "background rate'' of occupational mobility that could serve emergent demand in new occupations. We apply this methodology to the potential supply of transitioners in semiconductor processing technicians and other semiconductor production jobs. By analyzing the attribute compositions of industry-related occupations, our approach could help employers and firms to evaluate U.S. local labor forces for their potential match on wages and attributes with new roles created through large industrial capacity investments.