University of Wisconsin–Madison

Skilled Jobs that Do Not Require a Bachelor’s Degree

Our Center has just released my latest research presenting a new approach to the identification of middle-skill jobs, or relatively skilled occupations that do not typically require a bachelor’s degree for entry. I call these occupations Skilled Non-College Occupations (SNCOs). In comparison to empirical studies and measurement frameworks that use alternative definitions of middle-skill jobs, the findings show that SNCOs represent a much smaller proportion of jobs in the United States than prior research has shown. This new definition of middle-skill occupations is an attempt to provide a more accurate understanding of the nature of skilled non-college occupations in the U.S.

Middle-skill occupations are generally defined as those occupations that demand medium to relatively high skills but require less than a four-year college degree for entry, as measured by educational attainment, wages, or occupation-specific skill demands. There are three main approaches to identifying middle-skill occupations that use these variables to produce vastly different estimates of middle-skill jobs. Two widely cited studies yield employment estimates of middle-skill occupations between one-third (Holzer, 2015) to more than a half (National Skills Coalition, 2014). A third approach proposed by Jonathan Rothwell (2015) offers the most rigorous methodology, but only focuses on “skilled technical” occupations.

At the core of the estimates’ discrepancy are competing approaches to defining and isolating a quantitative measurement of skills. My method relies on a new skills index based on data from the Occupational Information Network (O*NET) program, sponsored by the U.S. Department of Labor. The new skills index, which aims at providing an improved measurement of skills, includes average scores from the O*NET knowledge, skills, training and experience categories. The new skills index is called the KSTE index. Skilled non-college occupations are defined as those occupations that report above-average values of the KSTE index and typically require less than a bachelor’s degree for entry. The methodology of the study is described in detail in the technical report.

Key findings

This study estimates that the combined employment of Skilled Non-College Occupations (SNCOs) accounted for 16.2% of all jobs in 2016, in contrast to studies that estimate that the employment of so-called middle-skill occupations in the U.S. represent one third to nearly half of total employment. An exploratory analysis yields six important findings:

  1. In non-college occupations (i.e., those typically requiring less than a bachelor’s degree), one in five jobs belongs to a relatively skilled occupation. In contrast, for college occupations (i.e., those typically requiring a bachelor’s degree or more), four in five jobs belong to a relatively skilled occupation. This extremely large difference in the likelihood of getting into a relatively skilled occupation with or without a bachelor’s degree should be a warning sign for advocates of career paths associated with middle-skill jobs.
  2. The exploratory analysis across occupations and industries reveals a composition of SNCOs that defies stereotypes of middle-skill jobs. Skilled care workers and technicians in the health care sector and skilled production workers in manufacturing are part of the group, as expected. Other occupations like first-line supervisors of administrative support workers, police officers, and sales representatives in the service sector add new layers of complexity to the notion of middle-skill jobs.
  3. Employment in SNCOs is concentrated in a relatively small number of detailed occupations, led in size by Registered Nurses. For instance, nearly half of all jobs in SNCOs is concentrated in the top 10 detailed SNCOs, out of 179 detailed SNCOs. This high concentration of employment across occupations, which is also observable across industries, suggests that studies that focus on specific occupations, possibly also within specific industries, may shed more light on the nature and dynamics of SNCOs and the different educational and career paths associated with them.
  4. The correlation between median occupational wages and the KSTE scores is quite low, challenging in principle the central tenets of human capital theory, where “learning,” represented in this case by the average knowledge, skills, training, and work experience required in each detailed occupation, is supposed to keep pace with “earnings” (Brown, Cheung, & Lauder, 2015, p. 213). This interactive visualization plots median hourly wages, KSTE scores and employment level across SNCOs, by typically required education and NAICS sector.

(Click on the image below to launch the interactive visualization)

  1. The SNCO wage distribution is much more symmetrical and more compact or egalitarian than the wage distributions of all occupations, skilled occupations, and non-college occupations. Mean hourly wages of SNCOs are more frequent between the low $20s and the mid $30s, or between a lower bound that stands somewhat below and an upper bound that stands well above the overall mean hourly wage of $24 in 2016. The distribution of KSTE values across SNCOs is much more skewed than the wage distribution, with most values concentrated toward the lower end of the distribution. The observed low correlation between occupational wages and the KSTE scores is then explained by the important differences in the shapes of their distributions.
  2. There is a clear mismatch between the aggregated levels of educational attainment typically required by SNCOs and the aggregated levels of educational attainment of workers in SNCOs. While more than two-thirds of jobs require a high-school degree or less, an estimate of two-thirds of the workers in SNCOs report levels of educational attainment above a high school diploma. The aggregated excess of education effectively attained by workers relative to the education occupations require suggests that a significant proportion of workers in SNCOs are overqualified or underemployed in terms of educational attainment. This result is consistent with findings in recent research on the relationships among education, skills, and employment in the U.S. (see Abel & Deitz, 2016; Beaudry, Green, & Sand, 2015; Cappelli, 2015; Fogg & Harrington, 2011).

Summing up, SNCOs in the U.S. represent a much smaller mass of employment compared to existing definitions of middle-skills jobs. More specifically, SNCOs (a) represent only one in five jobs that do not require a 4-year college degree for entry; (b) encompass a wide variety of occupations and industries, even though the jobs are highly concentrated in a relatively small number of occupations and industries; (c) usually pay above-average wages; (d) show a quite low correlation between wages and skills; and (e) include a significant proportion of workers who are potentially underemployed in terms of educational attainment.

The study leaves some important questions unaddressed. These questions refer to the demographics of workers in SNCOs, the dynamics of SNCOs over time, and the variation in the dynamics and composition of SNCOs across subnational geographic areas.  What is the composition of SNCOs in terms of age, sex, race, and ethnicity, and how has it changed over time? Have SNCOs expanded or contracted over the last decades, especially since the Great Recession? Are SNCOs expected to expand or contract in official employment projections? In terms of employment, which SNCOs have expanded or contracted, and which ones are projected to grow or decline? Do the relative size and composition of SNCOs vary significantly across states and metropolitan areas? Answers to these important questions should offer a more accurate understanding of the nature and dynamics of SNCOs in the U.S

 

References

Abel, J. R., & Deitz, R. (2016). Underemployment in the early careers of college graduates following the Great Recession (Working Paper No. 22654). National Bureau of Economic Research. https://doi.org/10.3386/w22654

Beaudry, P., Green, D. A., & Sand, B. M. (2015). The great reversal in the demand for skill and cognitive tasks. Journal of Labor Economics, 34(S1), S199–S247. https://doi.org/10.1086/682347

Brown, P., Cheung, S. Y., & Lauder, H. (2015). Beyond a human capital approach to education and the labour market: The case for industrial policy. In D. Bailey, K. Cowling, & P. Tomlinson (Eds.), New Perspectives on Industrial Policy for a Modern Britain (pp. 206–224). Oxford, U. K.: Oxford University Press.

Cappelli, P. H. (2015). Skill gaps, skill shortages, and skill mismatches: Evidence and arguments for the United States. ILR Review, 68(2), 251–290. https://doi.org/10.1177/0019793914564961

Fogg, N. P., & Harrington, P. E. (2011). Rising mal-employment and the Great Recession: The growing disconnection between recent college graduates and the college labor market. Continuing Higher Education Review, 75, 51–65.

Holzer, H. J. (2015). Job market polarization and U.S. worker skills: A tale of two middles (Brookings Institution Brief). Washington, D.C.: Brookings Institution.

National Skills Coalition. (2014, June 18). Discussion of methodology for 2014 middle-skill fact sheets. Available on request from the National Skills Coalition.

Rothwell, J. T. (2015). Defining skilled technical work (SSRN Scholarly Paper No. ID 2709141). Rochester, NY: Social Science Research Network. Retrieved from https://papers.ssrn.com/abstract=2709141

 

Matías Scaglione is a Senior Researcher at the Center for Research on College-Workforce Transitions (CCWT). Follow him on Twitter.

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