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Upskilling: Do Employers Demand Greater Skill When Workers Are Plentiful?

Alicia Modestino, Daniel Shoag and Joshua Ballance
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Daniel Shoag: Harvard University and Case Western Reserve University

The Review of Economics and Statistics, 2020, vol. 102, issue 4, 793-805

Abstract: Using a proprietary database of online job postings, we find that education and experience requirements rose during the Great Recession. These increases were larger in states and occupations that experienced greater increases in the supply of available workers. This finding is robust to controlling for local demand conditions and firm × job-title fixed effects and using a natural experiment arising from troop withdrawals as an exogenous shock to labor supply. Our results imply that the increase in unemployed workers during the Great Recession can account for 18% to 25% of the increase in skill requirements between 2007 and 2010.

Date: 2020
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