www.ppic.org California’s Future

In PPIC’s California 2025 report, a potential mismatch was highlighted between the level of education the future population is likely to possess and the level of education that will be demanded by the future economy. This study provides further evidence of the future work-force skills gap and discusses the causes, magnitude, and likely consequences of the gap. The workforce skills gap is already a reality in California. In recent decades, the demand for workers with a bachelor’s degree has grown. The share of workers with a college degree increased from 28 percent in 1990 to 34 percent in 2006. Over the same period, the wages of college-educated workers grew substantially, whereas the wages of less-educated workers were relatively stagnant. These conditions characterize an increase in demand for college-educated workers for which growth in supply has not kept pace. Since 1990, there have been relatively small shifts in employment toward industries and occupations that employ higher shares of workers with bachelor’s degrees. More important, the employment of college-educated workers has increased within most industries and occupations. Our analysis shows that if past trends in worker education within and across industries and occupations were to continue, the demand for college-educated workers in 2025 would be equivalent to 41 percent of California workers. We are not projecting a change in demand trends for college-educated workers but rathe