September 6, 2014

HIGHER EDUCATION BUBBLE UPDATE: Why Sally can’t get a good job with her college degree.

Wharton School professor Peter Capelli tried to figure out whether the problem in the labor market is because the jobs don’t require the skills that candidates are offering or because workers don’t have the proper skills that employers are seeking.

Here’s what he found. The main problem with the U.S. job market isn’t a gap in basic skills or a shortage of employees with particular skills, but a mismatch between the supply and the demand for certain skills. There’s a greater supply of college graduates than a demand for college graduates in the labor market.

This mismatch, according to Capelli, exists because most jobs in today’s economy don’t require a college degree. . . .

Women now earn about 60 percent of the roughly 1 million bachelor’s degrees granted each year, according to the National Center for Education Statistics. And about 30 percent of all women above age 25 have a college degree or more, according to the Census Bureau. (About 80 percent of women age 25 to 29 have a high school degree.)

Those degrees, however, aren’t translating into good jobs.

Which means that maybe Sally’s problem isn’t because she’s not qualified for the job, but, instead, is because Sally has skills that employers don’t want.

All is proceeding as I have foreseen.

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