Working Paper: NBER ID: w26844
Authors: Peter Q. Blair; Tomas G. Castagnino; Erica L. Groshen; Papia Debroy; Byron Auguste; Shad Ahmed; Fernando Garcia Diaz; Cristian Bonavida
Abstract: The demand for a skilled workforce is increasing even faster than the supply of workers with college degrees – the result: rising wage inequality by education levels, and firms facing a skills gap. While it is often assumed that increasing the number of college graduates is required to fill this gap, this paper explores the extent to which workers without BA college degrees can help fill this gap. To find workers without BA degrees who are potentially skilled through alternative routes (STARs), we use data on the skill requirements of jobs to compute the “skill distance” between a worker’s current occupation and higher wage occupations with similar skill requirements in their local labor market. Based on our calculations, of the 16 million non-college educated workers with skills for high-wage work (> twice median earnings), 11 million whom we term “Rising STARs” are currently employed in middle-to low-wage work. We propose a general taxonomy for STARs to identify potential job transitions to higher wage work within their current earnings category and across earnings categories.
Keywords: Labor Market; Job Market Signal; Non-college Educated Workers; Wage Inequality; Skills Gap
JEL Codes: E24; I24; J11; J24; O15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| skill content of a worker's current job (J24) | job market outcomes for non-college educated workers (F66) |
| skill content of a worker's current job (J24) | wages for non-college educated workers (J39) |
| improving the efficacy of signaling skills (J24) | reduce labor market imbalances (J68) |
| skill content of a worker's current job (J24) | transition to higher-wage occupations (J62) |
| rising stars among non-college educated workers (J69) | potential for higher-paying jobs (J62) |