Thoughts on the skills gap

Old, but interesting piece over at Prospect:

If we want to improve the quantity of jobs, we’ll have to do more to promote labor demand. We’ll need to worry less about robots and more about austere fiscal policy, imbalanced trade, weak capital investment, and bubbles and busts. If we want the jobs we create to be of higher quality, we’ll have to do more to lift workers’ bargaining power, by enforcing labor standards, raising minimum wages, and leveling the playing field for collective bargaining. Supply-side solutions targeting workers’ skills may well help the targeted individuals, but they won’t help raise the number and quality of jobs.

Eric Crampton’s piece “The STEM Sucking Sound” is an interesting read and related:

The government messes up teaching of maths at primary, making things harder at secondary. Then, pushes to increase NCEA Level 2 completion rates lead kids away from harder subjects and into more basket-weaving unit standards: basically, a form of stat-juking. So fewer numerate grads show up at university doors.

Next, Minister Joyce wants to push Sciences, Technology, Engineering and Maths. So Universities get way more money for degree completions in STEM subjects than for degree completions in other disciplines that require numeracy: economics, for example, but also education (for maths teachers). This has staffing and course offering consequences at the Universities, which kill off less lucrative lines.

The whole STEM thing is a bit overcooked. Technology isn’t that hard to learn if you have high general intelligence. The same goes for things like data analysis or even coding. It’s just a matter of intensity * hours worked on the right things. Looking to the government to set policy that will some how magically lead to better labour market outcomes for people who spend more time socialising at university rather than studying make this “issue” a bit moot.

By the time policy settings have changed, it’s simply too late. The importance of getting on the right career track is basically set up by what subjects you do at Level 2 / Level 3 and “stats juking” is basically going to ruin any genuine attempts to get higher skilled graduates out of the university pipeline and into good jobs – the sort of jobs they went to university for instead of getting a trade certificate or working in retail or hospitality.

Over the next few decades, enormous differences in labour market earnings are going to make things a bit more difficult for policy makers. They already live in a Wellington bubble, but their relatively higher earnings compared to many graduates means that their frame of reference for all of these policy settings is skewed in the direction of reliance on tertiary qualifications as an appropriate proxy for ability to perform the job.

I’m not convinced that incremental measures like limiting student loans to 5 years of full-time study can be reconciled with dreams of a STEM driven future. We have to remember that skill in STEM (technology in particular) is not normally distributed, and just because you graduate with a computer science degree does not mean that you will be able to contribute productively to a team of developers or engineers.

There are many more components to building a successful career and I think that this whole “government can design a perfect tertiary sector” project that has been going on since 1991 has run its course. It’s clear that material differences in graduate labour market outcomes even amongst those who study the same things, means that there is a lot more to do than having high level goals that can’t be reconciled with the dismal math learning experience many young Kiwis face in the schooling system.

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