The New STEM Labor Market Segmentation: Implications for Meeting Workforce Needs of DoD and the Industrial Base Hal Salzman Rutgers University E.J. Bloustein

The New STEM Labor Market Segmentation:Implications for Meeting Workforce Needs of

DoD and the Industrial BaseHal Salzman

Rutgers UniversityE.J. Bloustein School of Planning & Public PolicyJ.J. Heldrich Center for Workforce Development

Presented at:“Science Technology Engineering & Mathematics (STEM) workforce needs for

the U.S. Department of Defense (DoD) and the defense industrial base”National Academy of Engineering and

National Research Council

Rosslyn, VirginiaAugust 1, 2011

The research was supported through grants from the Alfred P. Sloan Foundation (with Lindsay Lowell) and the National Science Foundation (Human and Social Dynamics Program, #SES-0527584; Social Dimensions of Engineering, Science and Technology #0431755), with Leonard Lynn. Research assistance was provided by Daniel Kuehn (for analysis of the IPEDS data) and Purba Ruda.

STEM Workers Wanted:Is there a market failure?

The DoD S&E Problem: Not enough?

Overall size of the STEM pool relative to demand? Defense/security clearance eligible? Interested in defense-related work?

Why? Lack of student interest? Lack of student ability? Weak market demand?

The Solution: A “New Sputnik Moment” …..or Markets? A new STEM workforce segmentation

– limitation or opportunity for DoD?

Size & Trends of the STEM-Qualified Pool

DRAFT--Please do not circulate or cite.

U.S. trends in student mathematics performance

National Assessment of Educational Progress (NAEP 2008)

Source: NCES The Nation's Report Card: Trends in Academic Progress in Reading and Mathematics 2008http://nces.ed.gov/nationsreportcard/pubs/main2008/2009479.asp

Changes since 1973

Age Group White Black Hispanic

Age 9 ∆ 25 points ∆ 34 points ∆ 32 points



U.S. share of all OECD high-performing students:

Science, math and reading

Source: These figures are reproduced from: Salzman and Lowell, 2008; “Making the Grade” Nature 453, 28-30].

Science Math Reading

U.S.33.7%

Other OECD countries

24.8%

Japan11.9%

Germany7.9%

Korea6.9%

Canada5.0%

France5.0%

Turkey5.0%U.S.

14.1%


28.3%Korea16.2%

Japan15.2%

Germany11.1%

Canada5.1%

France5.1%

U.K.5.1%U.S.

33.0%


25.0%

Japan17.0%

U.K.11.0%

Germany9.0%

Canada5.0%


Transition Rates &

“Yield”


Transition Rates & Yield


Number of STEM Graduates, 1951-2002

0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

200,000

225,000

250,000

1951 1955 1959 1963 1967 1971 1975 1979 1983 1987 1991 1995 1999

Bachelor's degrees Master's degrees

Doctor's degrees

Figure 5. Percent of All Employed College Graduates Working in a STEM Field Three Years after Graduation

0

2

4

6

8

10

12

14

16

18

1977/80 1987/90 1993/96 1997/00

Cohort

Perc

en

t of

Em

plo

yed

Colleg

e G

rad

uate

s

Intersection of highest degree in science & engineering and S&E occupation:

2006

What is changing?

“Workforce Segmentation”

(I) Who stays in the pipeline


STEM Retention at three transition pointsby school performance

Track individuals from:(1) High school to college completion

(2) College to first job

(3) College to mid-career job

Track individual transitions x performance: High school SAT/ACT score, and College GPA, by performance quintile

High school graduates and college outcomes

(five years later)

Figure 1. Percent of High School Graduates who Major in STEM (obtained BS or enrolled in STEM program) by Level of STEM Preparation

(Score on Math SAT/ ACT)

0

5

10

15

20

25

30

35

1977 1987 1997 2005

BS Cohort

Perc

ent

of

Hig

h S

cho

ol

Gra

du

ates All High School Graduate Test

Takers

Quintile 5, most prepared

Quintile4

Quintile3

Quintile2

Quintile 1, least prepared

College graduates and their “mid-career” job

outcomes (ten years later)

Figure 6. Percent of STEM College Graduates Enrolled or Employed in STEM Ten Years after Graduation by Level of STEM Preparation

(College GPA Quintile)

20

25

30

35

40

45

50

1987 1996 2003

Cohort, Mid-Career Job

Perc

en

t of

STE

M C

olle

ge G

rad

uate

s

All STEM College Graduates

Quintile5 ,most prepared

Quintile4

Quintile3

Quintile2

Quintile1 ,least prepared

Notably, STEM graduates far exceed number of STEM jobs each year

Most students remain interested in STEM studies Percent of High School students studying STEM in college

generally constant since the1970s.

<50% of STEM graduates STEM job

However, starting in the 1990s many of the top performing HS students dropped out of the STEM college pipeline

And, in the mid-1990s fewer of the top STEM performers stay in STEM jobs at mid-career

What is changing?


(II) Who gets a STEM degree



Education Segmentation (II)


0%10%20%30%40%50%60%70%80%90%

100%

Comp

uter &

Info

Scien

ce

Engr

(Net

of Su

bfield

s)

Biolog

ical En

ginee

ring

Chem

ical En

ginee

ring

Civil E

ngine

ering

Comp

uter E

ngine

ering

Electr

ical En

ginee

ring

Mecha

nical E

ngine

ering

Nucle

ar En

ginee

ring

Petro

leum

Engin

eerin

g

Biolog

y

Physi

cal Sc

ience

Temporary Visa Share of Master's Degree Completions, by Discipline

1996

2006

Education Segmentation (II)

What is changing?


(III) STEM job & career type



Workforce Segmentation (III)

Is supply-side strategy needed?

Government intervention or the market?


Do Labor Markets Work (I)?

Do Labor Markets Work (II)?Engineers in the Petroleum Industry:

A Case of a Responsive Market?


Why the increase in demand?

Exploration New pipelines/Natural Gas Demographics – aging workforce Retirements and company policies Recruitment barriers in U.S./AK

Petroleum Engineering Starting Salaries

Source: IPEDS; Tabulations: Kuehn & Salzman, 2010Salary data from BLS & NACE


$43,674

$50,400

$55,987

$61,516

$86,220

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

1997 1999 2003 2005 2010

Petroleum engineering graduates Total graduates



Petroleum engineering graduates Total and U.S. [citizen & perm. resident] grads




Implications for DoD/Defense Industry Supply?

Opportunities & Challenges of the New STEM Segmentation


The New STEM Labor Market Segmentation

(1) Segmentation/degradation narrows market for high quality/domestic supply (and also supply)

(2) Challenges/limitations – advantage if not counter cyclical to IT industry (~40% of STEM workforce)

but creating oversupply could be a larger “threat” than cyclical or lagged tight labor markets (cf. life sciences, disequilibria analysis)

(3) Need to better understand demand – be cautious about interference in markets and oversupply

Questions?

Hal SalzmanRutgers University

E.J. Bloustein School of Planning & Public Policy

J.J. Heldrich Center for Workforce Development

[email protected]

Immigration yield for Top 10 H-1B employers FY07-09

Source: DHS USCIS: Initial H-1B I-129 Petitions FY07-09 & PERM Data FY07-09/ Ron Hira RIT, 2011.

The Global Engineering Race?

Growth of infrastructure between 1997 to 2007

Length, MilesUnited States1 China2

Interstate/Expressway 608 30,519Navigable Channels (680) 8,510Rail (4,030) 7,436(From: Lynn and Salzman, 2010) Sources:

1. National Transport Statistics, 2009. Bureau of Transport Statistics, U.S. Department of Transportation.

2. China Statistical Yearbook, 2008. National Bureau of Statistics of China.


The Global Engineering Race?


Solving the S&E “Shortage”:Are Markets “the Problem”?



$43,674

$50,400

$55,987

$61,516

$86,220

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

1997 1999 2003 2005 2010

Is government market intervention the response to the price of a free-market solution?

Non-STEM college degree holders in STEM jobs

College/Job Transition – Non-STEM majors entering STEM jobs:

1977/80 = 2.5%1997/00 = 7 %

Of total STEM workforce – Non-STEM majors in STEM jobs

1987/90 =16%1993/96 = 35%1997/00 = 40%

= significant share of STEM growth from non-STEM & immigrant workers

Documents

The New STEM Labor Market Segmentation: Implications for Meeting Workforce Needs of DoD and the Industrial Base Hal Salzman Rutgers University E.J. Bloustein