Upskilling: Do Employers Demand Greater Skill When Skilled Workers Are Plentiful?

Federal Reserve Bank of Boston, Working Paper No. 14-17

39 Pages Posted: 4 Jun 2016

See all articles by Alicia Modestino

Alicia Modestino

Northeastern University

Daniel Shoag

Harvard University - Harvard Kennedy School (HKS)

Joshua Ballance

Federal Reserve Banks - Federal Reserve Bank of Boston

Date Written: January 30, 2015

Abstract

The Great Recession and subsequent recovery have been particularly painful for low-skilled workers. From 2007 to 2012, the unemployment rate rose by 6.4 percentage points for noncollege workers while it rose by only 2.3 percentage points for the college educated. This differential impact was evident within occupations as well. One explanation for the differential impact may be the ability of highly skilled workers to take middle- and low-skilled jobs. Indeed, over this period the share of workers with a college degree in traditionally middle-skill occupations increased rapidly. Such growth in skill requirements within occupations has become known colloquially as "upskilling."

It is not clear from employment outcomes alone whether the increasing share of high-skilled workers in middle- and low-skill occupations reflects changing behavior by employers. Few researchers have been able to quantify rising employer requirements due to the difficulty in isolating labor demand from labor supply. In this paper, using a novel dataset of online job vacancy postings, the authors tackle the question of whether the education and experience requirements for job postings have risen between 2007 and 2012, and if so, whether this rise was driven by the state of the local labor market.

Keywords: upskilling, middle skills, vacancies, labor demand, employer search

JEL Classification: J23, J24, J63

Suggested Citation

Modestino, Alicia and Shoag, Daniel and Ballance, Joshua, Upskilling: Do Employers Demand Greater Skill When Skilled Workers Are Plentiful? (January 30, 2015). Federal Reserve Bank of Boston, Working Paper No. 14-17. Available at SSRN: https://ssrn.com/abstract=2788601 or http://dx.doi.org/10.2139/ssrn.2788601

Alicia Modestino (Contact Author)

Northeastern University ( email )

220 B RP
Boston, MA 02115
United States

HOME PAGE: http://www.northeastern.edu/cssh/faculty/alicia-sasser-modestino

Daniel Shoag

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

Joshua Ballance

Federal Reserve Banks - Federal Reserve Bank of Boston

600 Atlantic Avenue
Boston, MA 02210
United States

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