Book Chapter

The U.S. economy in recent years has been characterized by slow average productivity growth and increasing productivity dispersion within industries. These trends have coincided with analogous changes in wages—slow average wage growth and greater wage inequality between workers. In this essay, I discuss research into the potential causes of these patterns and outline several policy changes that would yield expected productivity and wage benefits under general conditions.

Career and technical education (CTE) is widely viewed as an important alternative to traditional four-year colleges, a means of increasing the earnings of U.S. workers, and an effective response to the changing skill requirements of U.S. employers. While abundant evidence confirms that CTE offerings at public institutions can increase the earnings and employment rates of graduates, substantial barriers to successful expansion of high-quality CTE remain. These barriers include a lack of accessible information about program quality that makes it difficult for students to identify high-return programs and insufficient funding for both CTE students and the public institutions that provide high-quality programs. Low completion rates among those starting CTE programs also limit their positive earnings effects.

Much of the public debate in recent years suggests that wages are not primarily determined by productivity. Indeed, the argument that the link between compensation and productivity has been effectively severed is commonly made. In this paper, I first discuss the wage-setting process and the conceptual issues that are of critical importance to any empirical investigation of the link between compensation and productivity. I then highlight some recent evidence suggesting that, contrary to the current narrative in some policy circles, the link between productivity and wages is strong.

In this chapter I examine whether and how the relationship between family socioeconomic characteristics and academic achievement has changed during the last fifty years. In particular, I investigate the extent to which the rising income inequality of the last four decades has been paralleled by a similar increase in the income achievement gradient. As the income gap between high- and low-income families has widened, has the achievement gap between children in high and low-income families also widened? The answer, in brief, is yes. The achievement gap between children from high- and low income families is roughly 30 to 40 percent larger among children born in 2001 than among those born twenty-five years earlier. In fact, it appears that the income achievement gap has been growing for at least fifty years, though the data are less certain for cohorts of children born before 1970. In this chapter, I describe and discuss these trends in some detail. In addition to the key finding that the income achievement gap appears to have widened substantially, there are a number of other important findings. First, the income achievement gap (defined here as the average achievement difference between a child from a family at the 90th percentile of the family income distribution and a child from a family at the 10th percentile) is now nearly twice as large as the black-white achievement gap. Fifty years ago, in contrast, the black-white gap was one and a half to two times as large as the income gap. Second, as Greg Duncan and Katherine Magnuson note in chapter 3 of this volume, the income achievement gap is large when children enter kindergarten and does not appear to grow (or narrow) appreciably as children progress through school. Third, although rising income inequality may play a role in the growing income achievement gap, it does not appear to be the dominant factor. The gap appears to have grown at least partly because of an increase in the association between family income and children’s academic achievement for families above the median income level: a given difference in family incomes now corresponds to a 30 to 60 percent larger difference in achievement than it did for children born in the 1970s. Moreover, evidence from other studies suggests that this may be in part a result of increasing parental investment in children’s cognitive development. Finally, the growing income achievement gap does not appear to be a result of a growing achievement gap between children with highly and less-educated parents. Indeed, the relationship between parental education and children’s achievement has remained relatively stable during the last fifty years, whereas the relationship between income and achievement has grown sharply. Family income is now nearly as strong as parental education in predicting children’s achievement

Industry 4.0 is at the center of the current debate among manufacturing leaders, industrial practitioners, policy makers and researchers. Despite the increasing attention paid to changes in jobs and skills generated by Industry 4.0, research in this domain is still scarce. Our study focuses on the evolution of technical skills in the context of Industry 4.0 and it provides qualitative insights gained from an ongoing collaborative research project involving a variety of manufacturing stakeholders in Northern Italy (e.g., manufacturing companies, industrial associations, academic and education experts, recruiting companies, IT providers, consultants, etc.). Our findings contributes to shed light on manufacturing skill needs linked to Industry 4.0, setting the stage for future research on the topic and providing companies, policy makers and education stakeholders with first indications to detect skill gaps and initiate competence development.

The complex interplay of globalisation, technological and demographic changes is generating many new opportunities but also challenges for many workers across the OECD. This chapter provides new evidence on three selected topics that have featured prominently in the debate on the future of work: job stability, under-employment and changes in the share of well-paid jobs. The results point to worsening labour market outcomes for those with less than tertiary education and for the young in several countries. In fact, young workers with less than tertiary education stand out as a group that has experienced a pronounced decline in fortunes across a large number of countries. This raises a two-fold challenge. First, policies must promote better opportunities for school-leavers entering the labour market. Second, policies are needed to improve job prospects for the generation of young people who have faced a very tough labour market environment in the past decade.

This chapter discusses the key role of adult learning in ensuring that all individuals can successfully navigate a changing labour market. It provides an overview of how several megatrends are changing job content and skill requirements. It identifies groups of adults that may face difficulties adapting to these changes unless they participate in re-skilling and up-skilling programmes. It also singles out workers in non-standard employment arrangements who face a number of challenges in obtaining training. For each group, the chapter discusses policy options to raise participation in training based on the specific barriers they face, be it the low quality of available training or a lack of motivation, time, money or employer support.

The OECD estimates that 14% of jobs are at high risk of automation - significantly fewer than some researchers have argued. [...]the fact that a job could potentially be automated does not mean that this will actually happen: automation may not always be cost-effective or desirable, it may raise legal and ethical concerns, and it will be affected by people's preferences and policy decisions. Skills acquired through experience should be recognised, and better financial incentives should be designed to reduce the cost of training borne by the most vulnerable groups. [...]it is critical to improve the quality of programmes and their alignment with current and future labour market needs, and to evaluate their effectiveness on a regular basis. [...]if they lose their job, many non-standard workers have limited access to vocational training, counselling and other employment-oriented programmes for the unemployed. In practice, however, these workers may not acquire rights to training, which often accrue with job tenure and depend on the numbers of hours worked. [...]self-employed workers are still very rarely covered by training rights legislation.

The purpose of this chapter is to identify the role of labour relations in shaping the future of work. The discussion starts by reviewing how social dialogue, and collective bargaining in particular, can be complementary and flexible tools along with labour market regulation to foster a more rewarding and inclusive future of work. This is followed by a discussion of what type of government intervention may be required to keep bargaining systems fit for purpose and make the most of collective bargaining in a changing world of work. Finally, the chapter reviews how existing institutions and social partners are adjusting to the new challenges in the labour market, as well as the role of emerging actors and new practices.