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Transitions in Work and Learning: Implications for Assessment (1997)

Chapter: Can Changing Skills be Accurately Measured by Existing Testing Technologies?

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Suggested Citation:"Can Changing Skills be Accurately Measured by Existing Testing Technologies?." National Research Council. 1997. Transitions in Work and Learning: Implications for Assessment. Washington, DC: The National Academies Press. doi: 10.17226/5790.
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FIGURE 2-1 Shifts in demand for skills and supply adjustments in the labor market.

The adjustment process could continue until the gap in earnings between the two groups is restored to its initial level. Alternatively, the initial gap might not be reached if (1) the demand for skills continues to increase and to outpace supply adjustments or (2) there are barriers or costs that limit the magnitudes of the supply adjustments. The second situation might, for instance, occur if too few students who graduate from high school have academic backgrounds that are strong enough for them to consider enrolling in college. Furthermore, the rising costs of attending college, combined with cuts in financial assistance for lower-

Suggested Citation:"Can Changing Skills be Accurately Measured by Existing Testing Technologies?." National Research Council. 1997. Transitions in Work and Learning: Implications for Assessment. Washington, DC: The National Academies Press. doi: 10.17226/5790.
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and middle-income families, could limit enrollments of students from such families (Kane, 1995).

Other imperfections in capital and labor markets might tend to reinforce these factors, leading to investments in higher education that are too small to restore earlier differentials between groups.3 In this case the wage and employment effects of mismatch will persist, even in the long run.

Finally, higher unemployment (as opposed to just lower employment) can also result from labor market mismatch.4 This will occur if (1) there are rigidities (such as minimum-wage laws) that keep wages among the less educated from fully adjusting to the lower equilibrium levels shown in Figure 2.1A or (2) the less educated prefer to keep searching for better jobs, rather than accepting jobs with lower wages.5 In both cases, one would expect to find the coexistence of (1) higher job vacancy rates for at least some firms and (2) higher unemployment rates for workers.6

Employer Choices: Hiring, Training, and Other Options

At least in theory, employers' skill needs are not fixed or absolute, and employers have a greater degree of choice over what they need than they might acknowledge. In the long run, employers choose among different levels of capital and technology that imply varying needs for skilled versus unskilled labor. For instance, a decision to replace production workers with some type of capital

3  

These other market imperfections include liquidity constraints on individuals (so that people are unable to borrow for college education today against their expected future earnings), planning horizons that are too short, and inaccurate expectations of future wages that understate returns to education. Of course, a different set of inaccurate expectations could just as easily lead to overinvestment in education (relative to what is "socially optimal"), as could a variety of other circumstances in which education merely serves as a sorting or signaling device rather than as a productivity-raising investment. For a recent statement of the latter arguments, see Weiss (1995).

4  

Lower employment could exist without higher unemployment if those without work withdraw from the labor force altogether. The issue of whether the distinction between being in and being out of the labor force makes sense for all those without work has been debated by economists in recent years (e.g., Clark and Summers, 1982; Flinn and Heckman, 1993).

5  

The issue of whether or not minimum wages contribute to unemployment among low-wage workers continues to be debated among economists (e.g., Card and Krueger, 1994; Neumark and Wascher, 1995). If their higher unemployment is due to longer periods of job search, this might be attributable to higher reservation (or minimally acceptable) wages among workers rather than government barriers in the labor market (e.g., Feldstein and Poterba, 1984).

6  

A skills mismatch would certainly result in high vacancy rates for jobs requiring more skills; if less skilled workers then refuse to accept lower-wage jobs, vacancy rates would rise for jobs requiring fewer skills as well. While there have been some analyses of job vacancy rates over time or across areas and job categories in the United States (e.g., Abraham, 1983; Holzer, 1989, 1994), such data are not routinely collected by the U.S. government; therefore such analyses are quite rare.

Suggested Citation:"Can Changing Skills be Accurately Measured by Existing Testing Technologies?." National Research Council. 1997. Transitions in Work and Learning: Implications for Assessment. Washington, DC: The National Academies Press. doi: 10.17226/5790.
×
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Suggested Citation:"Can Changing Skills be Accurately Measured by Existing Testing Technologies?." National Research Council. 1997. Transitions in Work and Learning: Implications for Assessment. Washington, DC: The National Academies Press. doi: 10.17226/5790.
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The dramatic shift in the American labor market away from manufacturing and the growing gap in earnings between high school and college graduates have contributed to a sense of alarm about the capacity of the nation's schools to supply adequately skilled graduates to the work force. The role that schools can or should play in preparing people to enter the world of work is hotly debated. In an effort to nurture the important and ongoing national dialogue on these issues, the Board on Testing and Assessment asked researchers and policymakers to engage in an interdisciplinary review and discussion of available data and implications for assessment policy.

Transitions in Work and Learning considers the role of assessment in facilitating improved labor market transitions and life-long learning of American workers. It addresses the apparent mismatch between skill requirements of high-performance workplaces and skills acquired by students in school, the validity of existing assessment technologies to determine skills and competencies of persons entering various occupations, and ethical and legal issues in the implementation of new testing and certification programs. The book also examines the role of assessment in determining needed skills; developing ongoing education and training; and providing information to employers, prospective workers, and schools.

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