Skills Gap Estimates for Institutional and Individual Decision-Making: A Progress Report

Author(s): Zhang,Tim; Stevens, David; and Li, Jing

Organizational Author(s): Jacob France Institute, University of Baltimore

Funding Source: Maryland Department of Labor, Licensing, and Regulation

Resource Availability: Publicly available

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Explores Maryland’s skills gap in order to better inform decisions in the education, training, and economic development realms.


This report examines the skills gap in Maryland using public data sources. The authors present findings from these sources and provide recommendations for next steps in addressing the gaps. For the purpose of this report, the authors define the skills gap as “the imbalance between labor demand and supply, for a certain skill level, for a discipline, in an industry, with an occupation, or in a geographic area. This imbalance often does not necessarily mean a shortage of skills supply; it could often imply the shortage of skills demand” (p.3).

“This report is intended to narrow a communication gulf about the popular skills gap topic. The main communities of interest and action [the authors] seek to reach through this report are public and non-profit education, training and economic development leadership teams. [The authors] hope this report advances convergence toward a shared understanding about whether and how available skills gap estimates should be used in specific defined applications…. The communication gulf matters because some important decisions are made based in part on beliefs about the existence, magnitude, composition and trajectory of skills gaps. These decisions have consequences. Some impacts are far-reaching. Some are unintended. Some are either irreversible or very costly to undo” (p.1).

“[The authors] use three datasets to specifically focus [their] analysis on Maryland:

  • American Community Survey (ACS) Public Use Microdata Sample (PUMS) files.
  • Longitudinal Employer-Household Dynamics (LEHD) Program Quarterly Workforce
  • Indicators (QWI) and Origin-Destination Employment Statistics (LODES)
  • Maryland Higher Education Commission (MHEC) Degree Information System (DIS)” (p. 4).
(Abstractor: Author and Website Staff)

Major Findings & Recommendations

“[The authors’] approach to measurement of skills gaps in Maryland is summarized in a series of introductory observations:

• Educational attainment is adopted as the single necessary proxy for direct measurement of a skill or skill mix, neither of which is available.
• [The authors] acknowledge that educational attainment can be thought of as a dynamic, or changeable, concept—an individual can acquire a new credential after reporting of the attainment metric that is available for research use. This new credential can be at a higher, more advanced, attainment level, or it can be at the same level but in a different field or major. In fact, simultaneous award of multiple credentials is not unusual. However, for practical use, only one educational attainment measure is adopted for each individual.
• Maryland’s economy is ‘open’, meaning that there are frequent movements of individuals in and out of the State. Some Maryland residents work out-of-state. Some of the employees working in Maryland businesses, non-profit organizations and government agencies live out-of-state. Some students enrolled in Maryland education institutions leave Maryland when they complete or interrupt their studies. Some employees working in Maryland organizations received their formal education elsewhere.
• The ‘open’ economy alert is important for placing [the authors’] gap estimates in a practical context for assessing relevance for particular types of decisions. [The authors’] basic approach, like that of many predecessors, is to compare an estimate of Maryland’s annual educational credential awards (a ‘supply’ metric) with an estimate of Maryland’s annual net hires (a ‘demand’ metric). Again, as described in the Data Sources section of this report, ‘net hires’ is calculated by subtracting separations from all hires in the same time period.
• Calculation of ‘supply’ and ‘demand’ alignment, as [the authors] and others are able to measure these concepts to arrive at a gap estimate, implicitly assumes that Maryland is a ‘closed’ economy—that employers only recruit from [Maryland’s] in-state educational institutions and that students exiting these institutions can only find an in-state job” (p.7-8).

(Abstractor: Author and Website Staff)

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Views: 140
Publication Date: 2014
Posted: 3/13/2017 8:30 PM
Posted In: Workforce System Strategies
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