RESEARCH ON FUTURE SKILL DEMANDS

A Workshop Summary

Margaret Hilton, Rapporteur

Center for Education

Division of Behavioral and Social Sciences and Education

NATIONAL RESEARCH COUNCIL OF THE NATIONAL ACADEMIES

THE NATIONAL ACADEMIES PRESS

Washington, D.C.
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Margaret Hilton, Rapporteur Center for Education Division of Behavioral and Social Sciences and Education

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THE NATIONAL ACADEMIES PRESS 500 Fifth Street, N.W. Washington, DC 20001 NOTICE: The project that is the subject of this report was approved by the Govern- ing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineer- ing, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropri- ate balance. This study was supported by Award No. N01-OD-4-2139, TO #179 between the National Academy of Sciences and the U.S. Department of Health and Human Services and by Award No. OPVT-7871 between the National Academy of Sciences and the Russell Sage Foundation. Any opinions, findings, conclusions, or recom- mendations expressed in this publication are those of the author(s) and do not necessarily reflect the views of the organizations or agencies that provided support for the project. International Standard Book Number-13: 978-0-309-11479-0 International Standard Book Number-10: 0-309-11479-9 Additional copies of this report are available from National Academies Press, 500 Fifth Street, N.W., Lockbox 285, Washington, DC 20055; (800) 624-6242 or (202) 334-3313 (in the Washington metropolitan area); Internet, http://www.nap.edu Printed in the United States of America. Copyright 2008 by the National Academy of Sciences. All rights reserved. Suggested citation: National Research Council. (2008). Research on Future Skill Demands: A Workshop Summary. Margaret Hilton, Rapporteur. Center for Educa- tion, Division of Behavioral and Social Sciences and Education. Washington, DC: The National Academies Press.

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The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Acad- emy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding en- gineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineer- ing programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Charles M. Vest is presi- dent of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Insti- tute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sci- ences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Coun- cil is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Charles M. Vest are chair and vice chair, respectively, of the National Research Council. www.national-academies.org

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PLANNING COMMITTEE ON RESEARCH EVIDENCE RELATED TO FUTURE SKILL DEMANDS Richard J. Murnane (Chair), Graduate School of Education, Harvard University David Autor, Department of Economics, Massachusetts Institute of Technology Beth A. Bechky, Graduate School of Management, University of California, Davis Peter Cappelli, The Wharton School of Business, University of Pennsylvania David Finegold, School of Management and Labor Relations, Rutgers University Arne L. Kalleberg, Department of Sociology, University of North Carolina, Chapel Hill Christopher E. Sager, Department of Psychology, University of Central Florida Margaret Hilton, Study Director Martin Orland, Senior Program Director (until July 2007) Dorothy Majewski, Administratie Assistant Terry Holmer, Senior Project Assistant (until July 2007) 

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Preface Over the past five years, business and education groups have issued a series of reports indicating that the skill demands of work are rising, due to rapid technological change and increasing global competition. The reports call for rapid improvements in K-12 and higher education to prepare young people with the higher skills said to be required for the coming century (Business–Higher Education Forum, 2003; Partnership for 21st Century Skills, 2005). The National Academies report Rising Aboe the Gathering Storm (National Research Council, 2007a) argued that, to meet growing global competition for high-skill, high-wage jobs, the government should increase funding of research and development and strengthen the science and mathematics education of the nation’s future workforce. The America Competes Act (Public Law 110-69), signed into law in August 2007, is designed to carry out the recommendations of that report. Researchers have begun to study changing workplace skill demands. Some economists have found that technological change is “skill-biased,” increasing demand for highly skilled workers and contributing to the grow- ing gap in wages between college-educated workers and those with less edu- cation (e.g., Berman, Bound, and Machin, 1998; Acemoglu, 2003). Autor, Levy, and Murnane (2003a) found that computerization and globalization are driving increasing demand for skills in solving non-routine problems and effectively communicating complex information, along with basic read- ing, writing, and mathematics skills. Extending this analysis, Levy and Murnane (2004) call for reorienting K-12 education to help more young people develop problem-solving and communication skills in the context of existing school subjects. ii

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iii PREFACE However, other studies of workplace skill demands have reached differ- ent conclusions. These differences result partly from differences in disciplin- ary perspective, research methods, and datasets. Economists focusing on supply and demand relationships often use data on wages and educational attainment as measures of demand for different levels of skill (Becker, 1964). For example, findings that technology is increasing demand for higher skills (e.g., Acemoglu, 2003) have been based on analyses of the growing gap in wages between college-educated workers and those with a high school di- ploma or less. Social scientists in other disciplines focusing on the content of jobs often use data from surveys, observations, interviews, and formal job analysis as measures of skill demand. Using these other measures, research- ers have found that, in different work settings, technology may increase or decrease skill levels or leave them unchanged (e.g., Appelbaum, Bernhardt, and Murnane, 2003; National Research Council, 1999). Some research draws on Bureau of Labor Statistics (BLS) databases of the mix of employment in various occupations and industries—both his- torically and projected for the future—to assess changing workplace skill demands. A few researchers have combined BLS data on changes in the mix of occupations with data derived from job analysis, such as the Diction- ary of Occupational Titles (DOT), a large national database of the skills required in many occupations (Autor, Levy, and Murnane, 2003b). Some of these studies have reached quite different conclusions, depending on the ele- ments of BLS data they incorporate. For example, in an early study looking ahead to the year 2000, Johnstone and Packer combined BLS projections of the fastest growing occupations with DOT data, concluding that “the new jobs in service industries will demand much higher skill levels than the jobs of today” (Johnstone and Packer, 1987, p. xiii). Thirteen years later, Barton (2000) combined BLS historical data and projections of the mix of occupations (not only the fastest growing occupations) with job analysis data and data from a national adult literacy study, finding that, on average across all occupations, the literacy requirements in 1986, 1996, and 2006 were the same. The findings of all of these strands of research on changing skill de- mands are limited by available methods and data sources. For example, studies and BLS forecasts, often assume that computer technology remains unchanged over time, despite rapid advances in computers and artificial intelligence. BLS forecasting methods are limited by a lack of attention to possible labor market adjustments in response to changes in wages and a failure to accurately project both the rapidly evolving capabilities of com- puters and the ways in which firms respond to those capabilities (Rosen- thal, 1997; National Research Council, 2000). Because case study research focuses on individual work sites or occupations, its results may not be representative of larger industry or national trends. At a more basic level,

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ix PREFACE there is some disagreement in the literature about how to define “skill” (Attewell, 1990). In part because of such disagreements, researchers have used a variety of measures of skill, making it difficult to compare findings from different studies or to accumulate knowledge of skill trends over time (Handel, 2003). In the context of this increasing discussion in the research literature and among policy makers, the National Institutes of Health and the Russell Sage Foundation asked the Center for Education to conduct a workshop on research evidence related to future skill demands. To ensure that the workshop would address the variety of research methods and datasets, the Center for Education assembled an interdisciplinary planning committee, which was chaired by Richard J. Murnane.

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Acknowledgments This report is a summary of a workshop on research evidence related to future skill demands convened by the National Research Council (NRC). The workshop would not have become a reality without the generous sup- port of the National Institutes of Health and the Russell Sage Foundation. Bruce Fuchs, director of the Office of Science Education in the National Institutes of Health, provided the initial catalyst for the project and served as a valuable resource for the staff and the steering committee. Russell Sage Foundation president Eric Wanner contributed helpful information about current research on workplace skills at an early stage of conceptualizing the activity, also sharing his views about the challenge of projecting future workplace skills at the workshop itself. We thank our colleagues who served on the planning committee, each of whom brought deep and varied expertise to the process of planning the workshop. Their diverse disciplines and perspectives on how workforce skills may change in the future added greatly to the success of the endeavor. Although the planning committee played an important role in designing the workshop, they did not participate in writing this report. We are especially grateful to the experts who quickly responded to our request for background papers on workforce skills: Eileen Appelbaum, Rutgers University; Heather Boushey, Center for Economic and Policy Research; Asaf Darr, University of Haifa (Israel); Stuart Elliott, National Research Council; Mary Gatta, Rutgers University; Michael J. Handel, Northeastern University; Fiona Murray, Massachusetts Institute of Technol- ogy; Suzanne Tsacoumis, Human Resources Research Organization; and Chris Wellin, Miami University of Ohio. Their papers provided a substan- tive context for the rich discussions that took place at the workshop. xi

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xii ACKNOWLEDGMENTS We also thank the many experts who participated as presenters, pan- elists, and discussants: Thomas R. Bailey, Columbia University; Harry J. Holzer, Urban Institute and Georgetown University; Janis Houston, Person- nel Decisions Research Institutes, Inc.; Ken Kay, Infotech Strategies, Inc.; Peter Kemper, Pennsylvania State University; Martin Kenney, University of California, Davis; Samuel Leiken, Council on Competitiveness; B. Lindsay Lowell, Georgetown University; Peter McWalters, Rhode Island commis- sioner of elementary and secondary education; Paul Osterman, Massachu- setts Institute of Technology; Dixie Sommers, Bureau of Labor Statistics; Ken Spenner, Duke University; and Susan Traiman, Business Roundtable. This workshop summary has been reviewed in draft form by indi- viduals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the Report Review Committee of the National Research Council. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and respon- siveness to the charge. The review comments and draft manuscript remain confidential to protect the integrity of the process. We thank the following individuals for their review of this report: Paul E. Barton, Labor Market Projections, Educational Testing Service; Robert I. Lerman, Department of Economics, American University and Senior Fellow, The Urban Institute, Washington, DC; Ioannis Miaoulis, president, Museum of Science, Boston, MA; and Kenneth Pearlman, consultant, Creative Personnel Management Consulting, Sarasota, FL. Although the reviewers listed above provided many constructive com- ments and suggestions, they were not asked to endorse the content of the report, nor did they see the final draft of the report before its release. The review of this report was overseen by Cary Sneider, Educator Programs, Museum of Science, Boston, MA. Appointed by the NRC, he was respon- sible for making certain that an independent examination of this report was carried out in accordance with institutional procedures and that all review comments were carefully considered. Responsibility for the final content of this report rests entirely with the author(s) and the institution. We are grateful for the leadership and support of Michael Feuer, execu- tive director of the NRC’s Division of Behavioral and Social Sciences and Education (DBASSE); Martin Orland, former director of the Center for Education; and Patricia Morison, interim director of the Center for Educa- tion and associate director of DBASSE. Richard Murnane, Chair Margaret Hilton, Study Director Planning Committee on Research Evidence Related to Future Skill Demands

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Contents 1 Framing the Research on Future Skills 1 2 Labor Market Trends: A Loss of Middle-Class Jobs? 6 3 Skill Demands of Knowledge Work 15 4 Skill Demands of Service Work 29 5 Promising New Data and Research Methods 44 6 Skill Supply and Demand 63 7 Implications for Education and Training 75 8 Final Reflections 84 References 92 Appendixes A Workshop Agenda 101 B Professional and Service Occupational Clusters 108 C Biographical Sketches of Planning Committee Members and Staff 109 xiii

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