Last week The Chronicle of Higher Education had a blog post that discussed two approaches to viewing the labor market — the “human capital outlook” approach and the “manpower” approach.
The authors of the post, Sandy Baum of Skidmore College and Michael McPherson of the Spencer Foundation, describe the manpower perspective as seeing the labor market as a “set of boxes called ‘occupations’ nested inside collections of businesses called industries.”
Understanding the evolution of the labor market and forecasting its future is essentially a matter, on the demand side, of examining the sizes of the various boxes and projecting their growth, building up the picture from particular industries into a global forecast. On the supply side, it’s about projecting the number of different kinds of degrees and credentials.
Baum and McPherson write that the other perspective sees the labor market is less rigid terms.
On the education side, the basic measure of how much human capital you have is educational attainment, the number of years you have been in school. (Human capital is also produced by health improvement, job training, experience, etc.) Over time, the labor market will adjust in a variety of ways to the availability of workers who offer more or less of this human capital substance.
The authors argue that while both perspectives are valuable, planning for the future “requires a more nuanced understanding of both labor markets and the role of education in equipping people to participate productively.”
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