Concern is growing in advanced economies, and in particular in the UK, about the skills gap: there is a gulf between the skills workers possess today and the skills bosses say they need. Such concern is often focused on the STEM sector. Thijs van Rens, associate professor in the Department of Economics at Warwick University, is convinced that low wages rather than inadequate training are to blame for the STEM skills gap. He said: “It is often taken for granted that the skills gap and skills mismatch is a supply problem and appropriate training is not available to workers. However, data shows that market wages do not reflect the relative demand for different types of skills. “Businesses complain about the lack of workers with STEM skills but are unwilling to raise wages for these workers???or reduce wages for workers with skills that are less in demand.” In his research van Rens used data on job finding rates, earnings and profits, industries and occupations to measure the extent of the skills mismatch or gap on the labour market???as well as the underlying frictions that gave rise to it. He suggested the labour market could adjust to a skills mismatch in two ways. The workforce could adapt to the demand for skills, for instance by acquiring training or changing occupation, or firms would need to adapt to the supply of skills. However for one or both of these to happen, wages needed to reflect the relative supply and demand for various skills. He set out three reasons why the skills mismatch existed: workers didn’t adjust to changes in skills demand; firms didn’t adjust to changes in skill supply, or wages did not reflect skills shortages. Van Rens also argued that reform of the education system is not an answer to the perceived lack of appropriately skilled workers. As long as wages did not reward certain skills workers would be less likely to acquire them, and even if they did, would find employment in higher-paid occupations that do not utilise these skills. “While firms complain about a shortage of qualified physicists and engineers on the labour market, a very large number of graduates in these fields work in the financial sector, where they only use their STEM skills to a very limited degree,” he added. “Encouraging universities to educate more physicists and engineers will not make any difference if these additional STEM graduates look for jobs in investment banks.”
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.