Tuesday, January 13, 2009

Skills-Matching During Recessions and Implications for Lower-Skilled Workers

On the New York Times blog Economix (Explaining the Science of Every Day Life), Princeton economist Alan Krueger has discussed the US job market for college graduates (here). Krueger raises the point that underutilisation of highly educated workers' skills should be a concern during periods of recession. He bases this on the idea that employers tend to be more selective in downturns - "the job situation is likely to weaken considerably for less-educated workers as the downturn persists, however, because employers are likely to raise skill requirements."

Krueger mentions research by UCD economist Paul Devereux, which finds that “the education levels of new hires within occupations are higher when the unemployment rate is high and this effect is more pronounced in lower-paying occupations.” Paul Devereux's paper "Occupational Upgrading and the Business Cycle" (Labour, 2003) is available here. The paper concludes with the idea that low-skilled individuals suffer most from recessions in terms of occupation quality and unemployment.


Martin Ryan said...

Some interesting comments on Krueger's blog-post, courtesy of NY Times readers:

"Why would Starbuck’s, or anyone else for that matter, want to hire an overqualified person who will be looking for a “real job” from the start? Too many educated people assume that jobs deemed beneath them will be overjoyed to hire someone with a degree."

"There have been times when I have been out of work and couldn’t get any type of jobs, including fast food. Then I learned to lie on the application and stop my educational history at the high school level."

Liam Delaney said...

I wonder has anyone tinkered with this as a variable in those false cv experiments that are used to assess discrimination?

Liam Delaney said...

there was an add in the independent the other day looking for people to act as car sales reps in Iraq and Afghanistan.

Martin Ryan said...

But Dubai has been hit. East Asian migrants are finding it tough remitting:


And the Dubai property bubble has burst: