FORECASTING DEMAND AND SUPPLY OF DOCTORAL SCIENTISTS AND ENGINEERS

Report of a Workshop on Methodology

Office of Scientific and Engineering Personnel

National Research Council

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FORECASTING DEMAND AND SUPPLY OF DOCTORAL SCIENTISTS AND ENGINEERS: Report of a Workshop on Methodology FORECASTING DEMAND AND SUPPLY OF DOCTORAL SCIENTISTS AND ENGINEERS Report of a Workshop on Methodology Office of Scientific and Engineering Personnel National Research Council NATIONAL ACADEMY PRESS Washington, D.C.

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FORECASTING DEMAND AND SUPPLY OF DOCTORAL SCIENTISTS AND ENGINEERS: Report of a Workshop on Methodology NATIONAL ACADEMY PRESS 2101 Constitution Ave., NWWashington, DC20418 NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competencies and with regard for appropriate balance. Support for this project was provided by the National Science Foundation and the Sloan Foundation. Opinions, findings, conclusions, or recommendations expressed in this publication are those of the authors and do not necessarily reflect the views of the sponsors. International Standard Book Number 0-309-07089-9 Additional copies of this report are available from: National Academy Press (http://www.nap.edu)2101 Constitution Avenue, N.W., Box 285Washington, D.C.20055800-624-6242202-334-3313(in the Washington metropolitan area) Copyright2000 by the National Academy of Sciences. All rights reserved. Printed in the United States of America

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FORECASTING DEMAND AND SUPPLY OF DOCTORAL SCIENTISTS AND ENGINEERS: Report of a Workshop on Methodology THE NATIONAL ACADEMIES National Academy of Sciences National Academy of Engineering Institute of Medicine National Research Council 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 Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Bruce M. Alberts 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 engineers. 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 engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. William A. Wulf is president 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 Institute 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. Kenneth I. Shine is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences 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 Council is administered jointly by both Academies and the Institute of Medicine. Dr. Bruce M. Alberts and Dr. William A. Wulf are chairman and vice chairman, respectively, of the National Research Council.

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FORECASTING DEMAND AND SUPPLY OF DOCTORAL SCIENTISTS AND ENGINEERS: Report of a Workshop on Methodology COMMITTEE ON METHODS OF FORECASTING DEMAND AND SUPPLY OF DOCTORAL SCIENTISTS AND ENGINEERS Daniel McFadden (NAS), University of California, Berkeley, Chair Charles Clotfelter, Duke University Ronald Ehrenberg, Cornell University Daniel Hamermesh, University of Texas Brett Hammond, TIAA/CREF Caroline M. Hoxby, Harvard University Thomas Kane, Harvard University Charles Manski, Northwestern University Ronald Oaxaca, University of Arizona Jack H. Schuster, Claremont Graduate University Paula Stephan, Georgia State University George Walker, Indiana University Staff Charlotte Kuh, Executive Director, Office of Scientific and Engineering Personnel George Reinhart, Project Officer, Office of Scientific and Engineering Personnel Cathy Jackson, Administrative Associate, Office of Scientific and Engineering Personnel

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FORECASTING DEMAND AND SUPPLY OF DOCTORAL SCIENTISTS AND ENGINEERS: Report of a Workshop on Methodology OFFICE OF SCIENTIFIC AND ENGINEERING PERSONNEL ADVISORY COMMITTEE 1997 – 98 Membership M. R. C. Greenwood, University of California, Santa Cruz, Chair David Breneman, University of Virginia Nancy Cantor, University of Michigan Carlos Gutierrez, California State University, Los Angeles Stephen J. Lukasik, Independent Consultant Barry Munitz, J. Paul Getty Trust Janet Norwood, The Urban Institute John D. Wiley, University of Wisconsin, Madison Tadataka Yamada, SmithKline Beecham Corporation Thomas Young, Lockeed Martin Corporation (Retired) Ex-officio Member William H. Miller, University of California Staff Charlotte Kuh, Executive Director Marilyn Baker, Deputy Executive Director

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FORECASTING DEMAND AND SUPPLY OF DOCTORAL SCIENTISTS AND ENGINEERS: Report of a Workshop on Methodology PREFACE This report presents the findings of a workshop organized by the Committee on Methods of Forecasting Demand and Supply of Doctoral Scientists and Engineers. The committee examined the methodologies that have been used to forecast labor market conditions for scientists and engineers, identified and analyzed additional methodologies, and recommended improvements in the way that forecasts are presented to users. The committee was charged with three tasks. These were: Identify how estimates of supply and demand for scientists and engineers are currently used by policymakers with particular emphasis on how these estimates relate to the level of federal funding for research and development and the financial health of the academic sector. Identify the sources of uncertainty, outline the importance of definitions and underlying assumptions to state-of-the-art projection methodology, and discuss how these uncertainties and assumptions can be fairly represented so that policymakers can understand both the strengths and limitations of the estimates that they see. Recommend ways of presenting projections so that the sources of uncertainty are explicitly taken into account. The Workshop on Improving Models of Forecasting Demand and Supply for Doctoral Scientists and Engineers met on March 19 –20, 1998. Four

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FORECASTING DEMAND AND SUPPLY OF DOCTORAL SCIENTISTS AND ENGINEERS: Report of a Workshop on Methodology panels of experts were invited to participate in presentations and discussions. Biographical descriptions of these participants are presented in Appendix B. The methodological issues focused on four areas: Forecasting Models: Objectives and Approaches identified the characteristics of good models of supply and demand for scientists and engineers. The panel discussed how adjustment can occur in three dimensions: quality, price, and quantity. The session focused on alternative approaches to these models and described what models could be estimated given available data. Neglected Margins: Substitution and Quality examined the effects of price, substitution, and immigration on the modeling of labor markets for scientists and engineers. Models of Scientific and Engineering Supply and Demand: History and Problems focused on shortage/ surplus or “gap” models used for estimation in the past. The panel examined their usefulness, purposes, and their potential for modification of gap models in order to take into account the simultaneous adjustment of quality and quantity. Presentation of Uncertainty and Use of Forecasts with Explicit Uncertainty investigated the best ways to communicate the sensitivity of model outputs to assumptions and uncertainty. The panel focused on how uncertainty should be presented to policymakers and others who are educated but not expert users. Forecast users and others with an interest in science personnel policy were invited to discuss their concerns about forecasts and their use. Appendix C lists persons who attended the workshop. Following the workshop, the committee met to formulate recommendations about productive avenues for research, data, and/or dissemination of the results of models for forecasting the

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FORECASTING DEMAND AND SUPPLY OF DOCTORAL SCIENTISTS AND ENGINEERS: Report of a Workshop on Methodology demand and supply for doctoral scientists and engineers. The committee reached consensus on five recommendations, which appear in this report. M. R. C. Greenwood Chair Office of Scientific and Engineering Personnel Advisory Committee

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FORECASTING DEMAND AND SUPPLY OF DOCTORAL SCIENTISTS AND ENGINEERS: Report of a Workshop on Methodology ACKNOWLEDGMENTS The Workshop on Improving Models of Forecasting Demand and Supply for Doctoral Scientists and Engineers benefited from the contributions of many people and was funded by the National Science Foundation (NSF) and the Sloan Foundation. The Committee on Methods of Forecasting Demand and Supply of Doctoral Scientists and Engineers acknowledges those who made the workshop successful. First and foremost are those workshop participants who prepared manuscripts that framed the issues for each panel. They include: Bert S. Barnow, Objectives and Approaches of Forecasting Models for Scientists and Engineers George Johnson, How Useful Are Shortage/Surplus Models of the Labor Market for Scientists and Engineers? Sherwin Rosen (and Jaewoo Ryoo), The Engineering Labor Market Nancy Kirkendall, All Models Are Wrong; Some Models are Useful. Special appreciation is expressed to Michael McGeary, who prepared Chapter 1 of this report. I wish to thank the members of the committee for their contributions to the workshop. In addition, important contributions to the workshop's success were made by the workshop participants: Michael Teitelbaum, Alfred P. Sloan Foundation; Jeanne Griffith, National Science Foundation; John A. Armstrong, IBM; Ronald Ehrenberg, Cornell University; Michael Finn, Oak Ridge Institute for Science and Education; Paula

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FORECASTING DEMAND AND SUPPLY OF DOCTORAL SCIENTISTS AND ENGINEERS: Report of a Workshop on Methodology Stephan, Georgia State University; Eric Weinstein, MIT; Geoff Davis, Dartmouth College; Charles A. Goldman, RAND; Sarah E. Turner, University of Virginia; Robert Dauffenbach, University of Oklahoma; Daniel Greenberg, Johns Hopkins University; Neil Rosenthal, Bureau of Labor Statistics; Alexander H. Flax, Institute for Defense Analyses; and Skip Stiles, Committee on Science, U.S. House of Representatives. This report has been reviewed by persons chosen for their diverse perspectives and expertise in accordance with procedures approved by the National Research Council's Report Review Committee. This independent review seeks to provide candid and critical comments that will assist the Office of Scientific and Engineering Personnel (OSEP) in making its report as sound as possible and will ensure that the report meets institutional standards of objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. We wish to thank the following for their participation in this review of the report: John Armstrong, Erich Bloch, and Robert Lerman. The project was aided by the invaluable help of the OSEP professional staff—Charlotte Kuh, executive director; George R. Reinhart, project officer; Cathy Jackson, administrative associate; and Margaret Petrochenkov, who provided editorial input. Finally, we wish to express our gratitude in memoriam to Alan Fechter, former executive director of the Office of Scientific and Engineering Personnel. Forecasting demand and supply for scientists and engineers was one of Alan's ongoing concerns, and this report is dedicated to his memory. Daniel McFadden Chair Committee on Methods of Forecasting Demand and Supply of Scientists and Engineers

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FORECASTING DEMAND AND SUPPLY OF DOCTORAL SCIENTISTS AND ENGINEERS: Report of a Workshop on Methodology CONTENTS     EXECUTIVE SUMMARY   1  1   BACKGROUND   9  2   MODELS OF DEMAND FOR DOCTORAL SCIENTISTS AND ENGINEERS   15  3   OBJECTIVES AND APPROACHES OF FORECASTING MODELS   23  4   NEGLECTED MARGINS OF ADJUSTMENT: SUBSTITUTION AND QUALITY   31  5   PRESENTATION OF UNCERTAINTY AND USE OF FORECASTS WITH EXPLICIT UNCERTAINTY   37  6   SUMMARY AND RECOMMENDATIONS   49     REFERENCES   61     APPENDIXES    A   WORKSHOP AGENDA   65  B   BIOGRAPHICAL INFORMATION ON WORKSHOP SPEAKERS   71  C   LIST OF WORKSHOP PARTICIPANTS   81

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