How can we explain the low rate of employment in the U.S.? This paper documents a decline in demand for job skills since 2000 even as the supply of highly educated workers continues to grow. The authors go on to show that in response to this demand reversal, high-skilled workers have moved down the occupational ladder and have begun to perform jobs traditionally performed by lower-skilled workers. This de-skilling process in turn results in high-skilled workers pushing low-skilled workers even further down the occupational ladder and, to some degree, out of the labor force all together.
David A. Green will be presenting on this research at the Center for Poverty Research October conference “Employment, Earnings and Inequality: Realities and Opportunities in Low Wage Labor Markets.” Green is a professor in the Vancouver School of Economics at the University of British Columbia and an International Fellow at the Institute for Fiscal Studies in London.