The Polarization of Job Opportunities in the U.S. Labor Market

Transcription

1 The Polarization of Job Opportunities in the U.S. Labor Market David H. Autor, MIT, NBER and IRP Employment Prospects for Lower Wage Workers IRP Wisconsin, March 2011

2 Labor Market Polarization 1. Two inertial forces on a collision course a. Polarization of job opportunities, reducing opportunities for middle-educated workers (high school grad esp) b. Stagnating educational attainment 2. Males are adapting particularly poorly 3. Social consequences extend beyond labor market 4. Why job opportunities are polarizing Technological change (of course) Trade also appears an important factor 5. Policy responses Boosting college attainment (of course) Enabling non-college workers to enter good careers

3 Employment Polarization, Percent Change in Employment by Occupation Sales Personal Care Protective Service Food/Cleaning Service Operators/Laborers Production Office/Admin Technicians Professionals Managers

4 Changes in Employment Share by Job Skill Tercile, Comparison of U.S. and European Union Countries US v. EU Averages EU Nations Ordered by Growth in High Skill Occupation Share USA EU Average Portugal Ireland Finland Norway Netherlands Greece Lower Third Upper Third UK Sweden Germany Middle Third Spain Belgium Denmark Luxembourg France Austria Italy Source: Goos, Salomons and Manning (2009)

5 Labor Market Polarization 1. Two inertial forces on a collision course a. Polarization of job opportunities, reducing opportunities for middle-educated workers (high school grad esp) b. Stagnating educational attainment 2. Males are adapting particularly poorly 3. Social consequences extend beyond labor market 4. Why job opportunities are polarizing Technological change (of course) Trade also appears an important factor 5. Policy responses Boosting college attainment (of course) Enabling non-college workers to enter good careers

6 !! Composition Adjusted College/High-School Relative Supply, !"#$%&'('

7 College/High-School Log Wage Gap, Log Wage Gap

8 ! Why the College/High-School Wage Gap Rose in the 1980s!"#$%&'()'!

9 Labor Market Polarization 1. Two inertial forces on a collision course a. Polarization of job opportunities, reducing opportunities for middle-educated workers (high school grad esp) b. Stagnating educational attainment 2. Males are adapting particularly poorly 3. Social consequences extend beyond labor market 4. Why job opportunities are polarizing: Technological change (of course) Trade also appears an important factor 5. Policy responses: Boosting college attainment (of course) Enabling non-college workers to enter good careers

10 !"#$%&'()' Stagnating Educational Attainment: Supply of Young Male and Female College v. High School Workers, !

11 & College Completion Rates by Sex, : 4*5/26&7-& Young Adults, ;1DD656&;1AED6W1<&X(06=&1H&Y1/<5&.+/D0=M&.56=&%$?FGM& KB&Z6<+62&(<+&X(96M&!>3"&?&%""7&!"#$"%&'()*+,"&"-'(),,"."' $$O& $"O& G$O& G"O& F$O& F"O& %$O& %"O&!$O&!"O& $O& "O& PI*06&Q(D6& PI*06& 46A(D6& RD(9S&Q(D6& RD(9S&46A(D6& T0I62&U1<? PI*06&Q(D6& T0I62&U1<? PI*06& 46A(D6&!>3"& %"O&!%O& VO& VO& F"O& %%O&!>>"& %GO& %GO&!%O&!GO& FVO& FFO& %""7& %VO& FGO&!VO& %%O& $%O& $GO& & (26&9(D9/D(06+&/=*<5&(DD&E62=1<&(56=&%$?FG-&;1DD656?51*<5&H12&!>3"&(<+&!>7"&*=&91<=*+626+&0I6&

12 Male College Completion Rates as of 2009 by Country and Birth Cohort US v. EU Averages European Union Nations 0 United States E.U. (10 Countries) Germany Netherlands Greece Spain United Kingdom Ireland Italy France Denmark Portugal Ages in 2009 Ages in 2009 Ages in 2009 Source: Eurostat, U.S. Census Bureau

13 Female College Completion Rates as of 2009 by Country and Birth Cohort US v. EU Averages European Union Nations 0 United States E.U. (10 Countries) Germany Netherlands Greece Spain United Kingdom Ireland Italy France Denmark Portugal Ages in 2009 Ages in 2009 Ages in 2009 Source: Eurostat, U.S. Census Bureau

14 Ratio of Female to Male College Completion Rates in 2009 by Country and Birth Cohort US v. EU Averages European Union Nations United States E.U. (10 Countries) Germany Netherlands Greece Spain United Kingdom Ireland Italy France Denmark Portugal Ages in 2009 Ages in 2009 Ages in 2009 Source: Eurostat, U.S. Census Bureau

15 Male HS Grad Rates: Falling for Post-1970 Birth Cohorts (Excluding GEDs) Red lines denote HS graduation rate of birth cohort Source: Heckman and LaFontaine, 2007

16 Female HS Grad Rates: Stable or Rising Birth Cohorts (excluding IGF IBF AGF Red lines denote MALE HS grad rates birth cohort.%,/$,0"12'3,0& ABF HGF HBF GGF GBF EGF EBF J-- KL"0&6 M-,9N6 O"65,2"96 O"65,2"96')29* Source: Heckman and LaFontaine, 2007

17 Male Earnings Growth : Lackluster Except Among 4*5/26&7-& Post-College Educated U"W& F"W& %"W&!"W& "W& G!"W& G%"W&!"#$%&'$(()% *+(,(-.%!"#$%&'$(()% /+01% &(23%4())3#3% 4())3#3%/+01% 5(6.74())3#3% 81-'09(:% ;0)36% 7<=>?% 7<=<A% <=><% B320)36% 7<=<>% <=<?% <=DE% &

18 Declining Occupational Stature among U.S. Males 18% All Education Lvls High School or Less Some College College Degree 15% % 9% 6% 3% % -3% -6% Low Skill Med Skill High Skill Low Skill Med Skill -3.9 High Skill Low Skill Med Skill High Skill -4.7 Low Skill Med Skill -3.3 High Skill % % % -18% Males Females

19 Labor Market Polarization 1. Two inertial forces on a collision course a. Polarization of job opportunities, reducing opportunities for middle-educated workers (high school grad esp) b. Stagnating educational attainment 2. Males are adapting particularly poorly 3. Social consequences extend beyond labor market 4. Why job opportunities are polarizing: Technological change (of course) Trade also appears an important factor 5. Policy responses: Boosting college attainment (of course) Enabling non-college workers to enter good careers

20 Incarceration Rate of Males Ages by Race White Men Black Men Hispanic Men year year year Less Than H.S. High School More than H.S. Source: Census and American Community Survey

21 Marriage Rates of Young Men Ages by Race White Men Black Men Hispanic Men year year year Less Than H.S. High School More than H.S. Source: Census and American Community Survey

22 Marriage Rates of Young Women Ages by Race White Women Black Women Hispanic Women year year year Less Than H.S. High School More than H.S. Source: Census and American Community Survey

23 Fraction of Young Women Ages Reporting at Least One Child Living in the Household White Women Black Women Hispanic Women Year Year Year Less Than H.S. High School More than H.S. Source: Census and American Community Survey

24 Fraction of Young Men Ages Reporting at Least One Child Living in the Household White Men Black Men Hispanic Men Year Year Year Less Than H.S. High School More than H.S. Source: Census and American Community Survey

25 Labor Market Polarization 1. Two inertial forces on a collision course a. Polarization of job opportunities, reducing opportunities for middle-educated workers (high school grad esp) b. Stagnating educational attainment 2. Males are adapting particularly poorly 3. Social consequences extend beyond labor market 4. Why job opportunities are polarizing Technological change (of course) Trade also appears an important factor 5. Policy responses Boosting college attainment (of course) Enabling non-college workers to enter good careers

26 AutomaIon of RouIne Tasks: Jacquard Loom (1801)

27 Magnitude of Import Growth from China: Staggering Growth in U.S. Imports from China per worker: $1,140 per worker, $1,870 per worker, China imports per worker (in 1,000s of US$) across CZs Changes among 40 most populous commuting zones: Largest : San Jose, Providence, Los Angeles, San Diego, Portland Smallest : New Orleans, Orlando, Washington, West Palm Beach

28 Change in Chinese Import Exposure and Change in Manufacturing Employment by Commuting Zone,

29 Magnitudes: What is Impact the Role onof manufacturing Trade and Outsourcing? employment How much of fall in U.S. manufacturing employment explained? 1 U.S. manufacturing Emp/Pop in 1990, 2000, 2007: : 13.86% 11.63% = 2.23% : 11.63% 9.41% = 2.22% 2 Chinese imports per U.S. worker: : $1, : $1,870 3 Chinese imports U.S. manufacturing Emp/Pop: : = 0.56 pct pts : = 0.92 pct pts 4 Pct of U.S. Manuf Emp/Pop due to China exposure: : 0.56/2.23 = 25.1% : 0.92/2.22 = 41.4% : 1.48/4.45 = 33.3%

30 Labor Market Polarization 1. Two inertial forces on a collision course a. Polarization of job opportunities, reducing opportunities for middle-educated workers (high school grad esp) b. Stagnating educational attainment 2. Males are adapting particularly poorly 3. Social consequences extend beyond labor market 4. Why job opportunities are polarizing Technological change (of course) Trade also appears an important factor 5. Policy responses Boosting college attainment (of course) Enabling non-college workers to enter good careers

31 Post-Secondary Degree Completion Ages in OECD Countries 2007: U.S. Rank 12 of 24 Percentage of 25- to 34-Year-Olds with an Associate Degree or Higher, 2007 Source: Organisation for Economic and Co-operative Development, Countries United States 24 Countries Canada Korea Russian Federation Japan New Zealand Ireland Norway Israel France Belgium Australia UNITED STATES Denmark Sweden Finland Spain United Kingdom Netherlands Luxembourg Switzerland Estonia OECD Average EU19 Average Iceland Slovenia Poland Greece Germany Hungary Portugal Mexico Austria Italy Chile Slovak Republic Czech Republic Turkey Brazil 55.8% 55.5% 55.5% 53.7% 47.3% 43.9% 42.7% 41.5% 41.4% 41.3% 40.7% 40.4% 40.1% 40.0% 39.3% 38.9% 37.1% 36.7% 35.7% 35.0% 34.6% 34.2% 31.0% 31.0% 30.1% 30.0% 28.1% 22.6% 22.0% 21.4% 19.5% 18.9% 18.9% 18.3% 17.5% 15.5% 13.6% 10.0%

32 Post-Secondary Degree Completion Ages in OECD Countries 2007: U.S. Rank 4 of 32 R Percentage of 55- to 64-Year-Olds with an Associate Degree or Higher, 2007 Source: Organisation for Economic and Co-operative Development, Countries United States 32 Countries Russian Federation Israel Canada UNITED STATES New Zealand Estonia Finland Australia Norway Sweden Netherlands Switzerland United Kingdom Denmark Japan Germany Iceland Belgium OECD Average Luxembourg EU19 Average Ireland France Spain Hungary Slovenia Greece Austria Poland Korea Slovak Republic Czech Republic Italy Mexico Chile Brazil Turkey Portugal 44.5% 43.5% 38.9% 38.5% 34.7% 28.4% 28.2% 26.6% 26.5% 25.9% 25.8% 25.6% 25.1% 24.2% 23.9% 23.1% 22.6% 22.3% 20.1% 18.9% 17.7% 17.5% 16.6% 15.9% 15.7% 15.6% 14.1% 13.9% 12.3% 10.9% 10.8% 10.7% 9.0% 9.0% 8.7% 8.2% 7.9% 7.4%

33 Labor Market Polarization 1. Two inertial forces on a collision course a. Polarization of job opportunities, reducing opportunities for middle-educated workers (high school grad esp) b. Stagnating educational attainment 2. Males are adapting particularly poorly 3. Social consequences extend beyond labor market 4. Why job opportunities are polarizing Technological change (of course) Trade also appears an important factor 5. Policy responses Boosting college attainment (of course) Enabling non-college workers to enter good careers

34 Enabling Non-College Workers to Attain Good Careers Good careers for non-college workers? a. Fewer than there used to be b. Require significant skill investments beyond high school, e.g., Radiology tech, Nurse, EMT, Plumber, Certified Mechanic Holzer et al. 2011: Where are All the Good Jobs Going? Overall, these results suggest that the ability of less-skilled workers to get jobs in the highest-paying firms declined, because the best-paying jobs in manufacturing were replaced by well-paid jobs in professional and information services and the presence of the least-skilled workers declined in the manufacturing jobs that remain (p. 41).

35 Enabling Non-College Workers to Attain Good Careers Making the most of what we have a. Many kids of recent vintage will not complete college esp. males b. There are some good jobs for non-college workers with right skills c. Also many fair-to-poor jobs for non-college workers w/o these skills Unlikely that non-college workers are investing optimally a. Problem is too hard b. Education does not provide right signals (Career Academies good example, Kemple et al. 2008) c. Traditional career tributaries for non-college drying up Can do better for non-college-bound youth

36 For-Profit College Enrollment Booming: For-Profit Share of Total, versus Source: Chronicle of Higher Education, June 22, 2010