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Upskilling During the Great Recession: Why Do Employers Demand Greater Skill When Workers Are Plentiful?

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Funder: Russell Sage Foundation

Principal Investigator: Alicia Sasser Modestino

Co-Principal Investigators: Phil Moss (UMass Lowell), Daniel Shoag (Harvard Kennedy School)

Award: $35,000

Description: Many jobs now require more education and experience than they did prior to the Great Recession.  Indeed, previous research shows that employers opportunistically engaged in this upskilling behavior by raising education and experience requirements during the Great Recession in response to increases in the supply of relevant job seekers (Modestino, Shoag and Ballance 2016).  Policymakers want to know if this “upskilling” is a temporary phenomenon related to the increased supply of applicants during the recession or if it represents a long-term shift in employer skill requirements related to increased competition or new technology.

This project seeks to understand what forces might be driving this behavior and to distinguish among alternative explanations for employers raising requirements using a mixed methods approach. First, using “big data” on 90 million job postings provided by Burning Glass Technologies, we will explore the characteristics of jobs have increased their skill requirements over time either temporarily or permanently in terms of industry, occupation, geography, and skill level.  Second, we will conduct a series of interviews with 50 select firms regarding their job openings, skill requirements, and hiring practices from four key industries in Massachusetts:  finance and banking, healthcare, life sciences and manufacturing.  The combination of both quantitative and qualitative data will provide insights into the prevalence of changing skill requirements while better understanding the mechanisms for this trend.  Our goal is to make policy recommendations for better investments in education and training for job seekers that can address potential skills gaps in the labor market as states seek to implement new requirements under the 2014 Workforce Investment and Opportunity Act (WIOA).

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