Skills Gaps: A Review of Underlying Concepts and Evidence

Employers have long cited an inadequately skilled workforce as the primary reason jobs go unfilled. However, there is considerable debate over whether a mismatch truly exists between workers' skills and employers' needs. A report from the Congressional Research Service, Skills Gaps: A Review of Underlying Concepts and Evidence, notes the possibility of other contributing factors such as:

  • overreliance on educational credentials as proxies for measuring skills regardless of job requirements;
  • rapid, technology-driven changes affecting the types of jobs available and the skills required;
  • employers' unwillingness to invest in worker training and development;
  • workers' need for access to affordable childcare or eldercare;
  • wage levels and/or working conditions.

The report also details several policy considerations as potential solutions:

Employer-Driven: Increasing wages, automation, and partnering with education and training providers are among the possible ways employers could address misalignments in their workforce. Although some options, like using technology or foreign labor, to supplement the domestic workforce are not only controversial but may have socioeconomic implications.
Federal-Driven: Federal government could increase support for programs and funding to assist with worker development and upskilling. Potential strategies include tax credits for education and training; enhancing the employability of populations of concern; and use of grants and loan forgiveness to encourage and subsidize earning academic credentials in fields/occupations with worker shortages. However, this may raise concerns about the scope and effectiveness of such strategies, as well as how best to implement measures of accountability.

Congressional Research Service report on Skills Gaps: A Review of Underlying Concepts and Evidence

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