Digitalization is Changing the Economy and Workforce

This report discusses how digitalization is vastly expanding the potential of the American economy, and generating opportunities for many. However, it is stated that the construction of an inclusive labor market as digitalization proceeds won’t happen by itself. Instead, it will require significant improvements in digital education and training, both to broaden the high-skill talent pipeline and ensure that underrepresented groups can connect to an increasingly digital economy. In addition, it is going to be important for workers to get better at being “what we are that computers aren’t.”

Key findings include:

-       Though digitalization is an ongoing trend, the U.S. economy has digitalized rapidly over the last decade.

-       The degree and pace of digitalization vary widely across occupations and industries.

-       Digitalization is associated with increased pay for many workers and reduced risk of automation, but it is also helping to “hollow out” job creation and wages by favoring occupations at the high and low ends of the pay scale while disfavoring those in the middle.

-       The extent of digitalization also varies widely across places and is strongly associated with variations in regional economic performance.

-       Digitalization is changing the skills needed to access economic opportunity while creating new race- and gender-based access challenges.

Muro, M., Liu, S., Whiton, J., & Kulkarni, S. (2017). Digitalization and the American workforce. Washington, D.C.: The Brookings Institution. https://www.brookings.edu/wp-content/uploads/2017/11/mpp_2017nov15_digitalization_full_report.pdf

Positive Economic Effects of Improving PISA Outcomes

This report uses recent economic modelling to relate cognitive skills – as measured by PISA and other international instruments – to economic growth, demonstrating that relatively small improvements to labor force skills can largely impact the future well-being of a nation. The report also shows that it is the quality of learning outcomes, not the length of schooling, which makes the difference. A modest goal of all OECD countries boosting their average PISA scores by 25 points over the next 20 years would increase OECD gross domestic product by USD 115 trillion over the lifetime of the generation born in 2010. More aggressive goals could result in gains in the order of USD 260 trillion.

OECD (2010). The high cost of low educational performance: The long-run economic impact of improving PISA outcomes. Paris, France: OECD. https://www.oecd.org/pisa/44417824.pdf

 

Economic Struggles for Young Generation in Recession

Based on a report based on findings of a survey by the Pew Research Center, some of the key findings include:

-       Young adults are hit hard by the recession. A plurality of the public (41%) believes young adults, rather than middle-aged or older adults, are having the toughest time in today’s economy. 

-       Public says today’s young adults have it harder than their parents did. Large majorities of the public say it’s harder for young adults to reach many of the basic financial goals their parents may have taken for granted. 

-       Tough economic times altering young adults’ daily lives, long-term plans. While negative trends in the labor market have been felt most acutely by the youngest workers, many adults in their late 20s and early 30s have also felt the impact of the weak economy. 

-       Adulthood begins later than it used to. In a 1993 Newsweek poll, 80% of parents with young children said children should be financially independent from their parents by the age of 22. 

-       For young adults, bad times don’t trump optimism. Among those ages 18 to 34, nearly nine-in-ten (88%) say they either have or earn enough money now or expect they will in the future. 

-       Older adults have maintained their standard of living. If any age group has weathered the economic storm better than others, it has been adults ages 65 and older. 

-       Among the employed, job satisfaction has remained steady… For those young adults who are employed, most are relatively satisfied with their job. 

Taylor, P., Parker, K., Kochhar, R., Fry, R., Funk, C., Patten, E., & Motel, S. (2012). Young, underemployed and optimistic: Coming of age, slowly, in a tough economy. Washington, D.C.: Pew Research Center. http://assets.pewresearch.org/wp-content/uploads/sites/3/2012/02/young-underemployed-and-optimistic.pdf