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Science, Technology, Engineering, and Math (STEM) jobs are a key contributor to economic growth and national competitiveness. Yet STEM workers are perceived to be in short supply. This paper shows that the ‘STEM shortage’ phenomenon is explained by technological change, which introduces new job tasks and makes old ones obsolete.
We find that the initially high economic return to applied STEM degrees declines by more than 50 per cent in the first decade of working life. This coincides with a rapid exit of college graduates from STEM occupations. Using detailed job vacancy data, we show that STEM jobs changed especially quickly over the last decade, leading to flatter age-earnings profiles as the skills of older cohorts became obsolete. Our findings highlight the importance of technology-specific skills in explaining life-cycle returns to education, and show that STEM jobs are the leading edge of technology diffusion in the labor market.
David Deming is a Professor at the Harvard Kennedy School and the Harvard Graduate School of Education, the Director of the Harvard Inequality and Social Policy Program, and a Research Associate at the National Bureau of Economic Research. His research focuses broadly on the economics of skill development, education and labor markets. He is currently serving as a coeditor at the American Economic Journal: Applied Economics, and is a Principal Investigator (along with Raj Chetty and John Friedman) at the CLIMB Initiative, an organisation that seeks to study and improve the role of higher education in social mobility. He recently won the David N. Kershaw Prize, which is awarded biannually to scholars who have made distinguished contributions to the field of public policy and management under the age of 40.
A light lunch will be available from 12 - 12.15pm. Please register at the registration tab above.