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Downskilling: changes in employer skill requirements over the business cycle
Using a novel database of 82.5 million online job postings, we show that employer skill requirements fell as the labor market improved from 2010 to 2014. We find that a 1 percentage point reduction in the local unemployment rate is associated with a roughly 0.27 percentage point reduction in the fraction of jobs requiring at least a bachelor?s degree and a roughly 0.23 percentage point reduction in the fraction requiring five or more years of experience. This pattern is established using multiple measures of labor availability, is bolstered by similar trends along heretofore unmeasured ...
“No more credit score”: employer credit check bans and signal substitution
In the past decade, most states have banned or considered banning the use of credit checks in hiring decisions, a screening tool that is widely used by employers. Using new Equifax data on employer credit checks, the Federal Reserve Bank of New York Consumer Credit Panel/Equifax data, and the LEHD Origin-Destination Employment data, we show that these bans increased employment of residents in the lowest-credit score census tracts. The largest gains occurred in higher-paying jobs and in the government sector. At the same time, using a large database of job postings, we show that employers ...
Upskilling: do employers demand greater skill when skilled workers are plentiful?
The Great Recession and subsequent recovery have been particularly painful for low-skilled workers. From 2007 to 2012, the unemployment rate rose by 6.4 percentage points for noncollege workers while it rose by only 2.3 percentage points for the college educated. This differential impact was evident within occupations as well. One explanation for the differential impact may be the ability of highly skilled workers to take middle- and low-skilled jobs. Indeed, over this period the share of workers with a college degree in traditionally middle-skill occupations increased rapidly. Such growth in ...