Higher education institutions play an outsized role in facilitating skill development, yet employers regularly cite a gap between the skills they need and those new college graduates possess. One explanation for this disconnect is that technological change, industrial restructuring, and international trade are continuously evolving the demand for skills in the labor market, but that investment is slow to respond. This project uses several quasi-experimental techniques, and the universe of all online job ads paired with novel data on college course-taking over the past decade, to study how skill accumulation responds to changes in local skill demand. Moreover, the project team investigates a range of supply-side features that may mediate responses. Finally, the project team undertakes rich descriptive analyses of the link between majors, skills, and jobs using machine-learning techniques.
This project seeks to answer three interrelated questions:
1) What general and specific skills are associated, in practice, with each college major?
2) How does across and within-major skill demand vary over time, space, and with other characteristics?
3) How does higher education investment respond to these changes in the demand for skills?
The project’s findings have the power to shape institutional policy making and priority-setting. These causal analyses will help administrators better understand the degree to which institutions like theirs have been able to respond to relevant shifts in labor market demand and how these results can be used to structure conservations among institutional leaders and policymakers about ways in which institutions might become more responsive moving forward.