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This file, titled “RURAL WORKFORCE 2000: SKILL UPGRADING AND THE RURAL ECONOMY, 1970-2000,” by Ruy A. Teixeira and Lawrence Mishel, challenges the “supply-push” theory of rural development, which posits that increasing education in rural areas will lead to economic growth due to an increasing demand for skilled labor. The authors argue that this theory is based on a flawed premise of a rapidly emerging “high skill economy” and a “skills mismatch.”Here’s a summary of the key findings:
- National Skill Trends: Historical data (1960-1985) do not support a rapid movement toward a high-skill economy. The rate of increase in job skill levels, measured by “substantive complexity,” declined significantly from the 1960s to the 1980s. Projections for 1988-2000 indicate a further slowdown in occupational upgrading, with future change rates typically around two-fifths to two-thirds of historical rates. This suggests that the shift to a “service economy” will not, by itself, produce a highly skilled job structure.
- Rural vs. Urban Skill Trends:
- 1970s: Rural areas experienced higher growth rates in job skill requirements than urban areas, participating fully in the modest national growth.
- 1980s: Rural areas saw a dramatic slowdown in job skill requirements growth (rates less than one-fifth, and in some cases, less than one-tenth of the previous decade), while urban areas experienced only a slight slowdown. This indicates that demand-side conditions for skilled jobs weakened much more rapidly in rural areas.
- 1990s Projections (under optimistic scenarios): Even under the optimistic assumption of equal occupational growth rates across rural and urban areas, future rural growth in job skill levels will still lag far behind historical 1970s rates. More realistic scenarios, based on 1980s trends, project “anemic” growth in rural job skill requirements.
- Critique of Alternative Interpretations:
- Within-occupation upgrading: The authors acknowledge that changes in job content (e.g., due to technology) could lead to skill upgrading. However, they argue that there is insufficient data to accurately estimate this, and existing evidence suggests limited widespread upgrading, with only 5% of employers believing education and skill requirements are rising significantly.
- Skill supply creates its own demand: The authors are skeptical that increasing skill supply will automatically lead to a matching increase in skill demand, citing historical examples of the relative independence of skill demand and supply.
- Conclusion: The paper concludes that an education-based “supply-push” approach to rural development is likely ineffective because the primary obstacle is on the demand side (weak demand for high-skill jobs). While more education may help individuals in rural areas (though it might also encourage out-migration), it is unlikely to lead to broad rural prosperity unless coupled with demand-oriented policies. Such policies might focus on providing information infrastructure to support high-skill sectors, making rural areas more “urban-like” in terms of economic opportunity.
