A new study finds that colleges and universities are responding to changing labor market needs.
Dr. Kevin Stange
The paper quantifies the magnitude and nature of human capital responses to shifts in labor market demand for oft-critiqued undergraduate programs at four-year institutions across the U.S. The research examines whether colleges and universities provide students timely, in-demand skills through their training and education programs.
The study indicates that the institutions are being responsive, according to Stange, an associate professor of public policy at Michigan. It found, for example, that a 1% increase in demand for jobs in a particular field led to a 1.3% increase in course-taking and degrees in that field.
“Media reports on this topic tend to focus on highly selective private institutions, where a lot of students study in fields that are less directly related to the labor market and where there are many more students in research-focused graduate programs,” said Stange. “But that’s not where the bulk of students go.”
Stange said institutions that are moderately selective or open access — with more students — tend to be more responsive. He said institutions need flexibility to make changes to their curriculums that accommodate the changing needs of the labor market.
The study resolves that both supply-side constraints and demand-side preferences are important in shaping human capital responses to skill demand; but policy efforts that aim to align educational investment with labor demand may struggle to achieve such goals if they target only one side of the market.
“There are two sides of this,” said Stange. “There is demand from the students, but there are also decisions by the institutions. They interact in important ways to make sure investment is responding to changes in the economy.
“We can’t quite tease apart this phenomenon, but we know that institutions need some autonomy to be responsive.”
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