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Training more STEM graduates ‘won’t fill skills gap’

Higher wages, not increased supply, are the solution to the science and technology skills gap, says Thijs van Rens, an economist at the University of Warwick.

Speaking at an event hosted by the Social Market Foundation think tank on 10 December, van Rens challenged the narrative often repeated by industry and policymakers that we need more science, technology, engineering and mathematics graduates to fill a growing skills gap.

Based on analysis of unemployment data in the United States, and preliminary studies on UK data, van Rens says that there are three possible reasons why the skills gap persists. One is that workers are not adjusting to changes in demand by acquiring the skills they need to do a job. Alternatively, firms are not adjusting to changes in skills supply by creating jobs that utilise skills that are already available in the labour market. The other possibility is that wages are not reflecting skills shortages, either by creating higher financial incentives for workers to acquire scarce skills or by lowering wages of jobs where skills are in abundance.

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