Working Paper: NBER ID: w17213
Authors: David Neumark; Hans P. Johnson; Marisol Cuellar Mejia
Abstract: The impending retirement of the baby boom cohort represents the first time in the history of the United States that such a large and well-educated group of workers will exit the labor force. This could imply skill shortages in the U.S. economy. We develop near-term labor force projections of the educational demands on the workforce and the supply of workers by education to assess the potential for skill imbalances to emerge. Based on our formal projections, we see little likelihood of skill shortages emerging by the end of this decade. More tentatively, though, skill shortages are more likely as all of the baby boomers retire in later years, and skill shortages are more likely in the near-term in states with large and growing immigrant populations.
Keywords: skill shortages; labor force projections; baby boomers; educational attainment
JEL Codes: J11; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Retirement of baby boomers (J26) | Skill shortages in the U.S. economy (J23) |
| Retirement of baby boomers (J26) | Slow growth of skill levels in the workforce (J24) |
| Younger, less-educated cohorts replacing retiring boomers (J26) | Mismatch between skills demanded and skills supplied (J24) |
| Demand for skilled workers (J24) | Outpace supply in certain states (R31) |
| Skill mismatches (J24) | Adverse effects on unemployment rates (F66) |
| Skill mismatches (J24) | Adverse effects on economic growth (F69) |
| Retirement of baby boomers (J26) | Increased risk of skill shortages in states with large immigrant populations (J69) |