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

52 Pages Posted: 24 Jan 2024

See all articles by Elizaveta Gonchar

Elizaveta Gonchar

Georgia Institute of Technology

Christophe Combemale

Carnegie Mellon University - Engineering and Public Policy (EPP); Valdos Consulting

Krishnan Ramayya

School of Information Systems and Management, The H. John Heinz III College

Date Written: December 31, 2023

Abstract

Expansionary industrial policies, such as the CHIPS and Science Act, are followed with notable surges in labor demand within the industries they target. In the case of the CHIPS and Science Act, industries such as semiconductor manufacturing experienced significant influxes in financial investment, with $231 billion being committed to Semiconductors & Electronics thus far. Recognizing the imperative to address such labor demand shocks, we propose a novel operational methodology. This methodology, informed by economics, assesses potential supply-demand skill discrepancies, and incorporates factors such as the intertemporal occupational rates of transition and regional wage distributions. By analyzing the skill compositions inherent to industry-related occupations, our approach provides a strategic advantage to policymakers and industry stakeholders, enabling them to identify specific U.S. locales with the requisite skill profiles and potential wage structures. Furthermore, the practical application of our methodology is embodied in the Workforce Insights Tool, which offers comprehensive labor insights. To substantiate the efficacy of our approach, we consider the semiconductor manufacturing industry in the context of the CHIPS and Science Act as a representative case study, exploring diverse strategies for the construction of skill profiles for industry-related occupations.

Suggested Citation

Gonchar, Elizaveta and Combemale, Christophe and Ramayya, Krishnan, Build It and They Will Come? US Regional Labor Composition and Readiness to Meet Skill Demand Shocks from CHIPS and Science (December 31, 2023). Available at SSRN: https://ssrn.com/abstract=4680624 or http://dx.doi.org/10.2139/ssrn.4680624

Elizaveta Gonchar

Georgia Institute of Technology ( email )

Atlanta, GA 30332
United States

Christophe Combemale (Contact Author)

Carnegie Mellon University - Engineering and Public Policy (EPP) ( email )

Pittsburgh, PA 15213
United States

Valdos Consulting ( email )

2785 Beaver Grade Road
Coraopolis, PA PA 15108
United States

Krishnan Ramayya

School of Information Systems and Management, The H. John Heinz III College ( email )

Pittsburgh, PA 15213-3890
United States

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