Skills Gaps: A Review of Underlying Concepts and Evidence. CRS Report R47059, Version 3

This report is a response to congressional requests for the Congressional Research Service (CRS) to identify, synthesize, and explain the core components of the workforce skills gap discourse and, to the extent possible, explore and clarify evidence on the existence of skills gaps. The report acknowledges that the skills gap label is often applied to several different circumstances and conditions, and it offers a discussion of the varied meanings associated with the term. The report attempts to shed light on the nature and existence of various types of skills misalignments and explores their potential policy implications. The report presents a limited review of indicators that are commonly cited as evidence of the existence of skill misalignments. These include broad indicators examining job openings and hires, employer wage responses to unfilled jobs, educational credentials possessed in relation to those required, and the adequacy of measurable foundational skills among current (and future) workers. The report notes that these indicators, which measure trends of relevance to the skills gap debate, do not clearly suggest that widespread misalignments exist. At the same time, this review cannot rule out misalignments as a possibility. The report notes as well that available existing broad indicators have limitations, some indicators may be imprecise, and some indicators are generated through imperfect research. With regard to a more narrow examination of skill shortages affecting particular occupations or fields in which there is an undersupply of credentialed workers, or in which work demands may be changing rapidly, the report notes there is more agreement about the existence of some misalignments. The report highlights illustrative examples of fields in which evidence points to shortages. Also discussed is the complexity associated with isolating the causes when occupations, employers, and regions face difficulty in filling positions. That is, it is difficult to attribute hiring challenges to a skills shortage when there are often many other plausible explanations for hiring challenges. Throughout the report, there is discussion of enduring challenges that complicate policymaking in this arena. One is that the skills gap label encompasses a series of somewhat separate (but interrelated) issues, and it is not clear that there is a common problem definition or consensus about what may need to be addressed. Further, it can be hard to reach agreement about respective responsibilities of workers, employers, and government in ensuring the acquisition of skills. While there are numerous federal investments promoting a skilled workforce, there is no clear agreement about whether, or the extent to which, the different skills-related challenges being addressed by federal policies need to be thought of as a continuum and addressed in an interconnected manner.