Future Skill Shortages in the U.S. Economy?
David Neumark, University of California, Irvine
Hans Johnson, Public Policy Institute of California (PPIC)
Marisol Cuellar Mejia, Public Policy Institute of California (PPIC)
The impending retirement of the baby boom cohort represents the first time in the history of the United States that such a large and well-educated group of workers will exit the labor force. This could imply skill shortages in the U.S. economy. We develop medium-term labor force projections of the educational demands on the workforce and the supply of workers by education to assess the potential for skill imbalances to emerge. Based on our formal projections, we see little likelihood of skill shortages emerging by the end of this decade. More tentatively, though, skill shortages are more likely as all of the baby boomers retire in later years, and skill shortages are more likely in the medium-term in states with large and growing immigrant populations. We discuss conflicting evidence on skill shortages based on alternative projections as well as criticisms of the definition of skill requirements, concluding that our projections are likely the most reasonable.