Opportunity Knocks: Improved Matching of Jobs and Workers

During the early phase of the labor market recovery, employment growth consisted of a modest recovery in middle-skill jobs, those hardest hit in the recession. In the later phase of the recovery, employment growth shifted strongly toward high-skill occupations. Over the past year, the labor market has seen notable improvements in the allocation of workers toward jobs that closely match their level of education. Since the end of the Great Recession, the U.S. labor market has recovered substantially: 12 million jobs have been added to private payrolls, and the unemployment rate has fallen from 10 percent to 5.4 percent. In the first phase of the recovery (2010-11), employment growth was modest and primarily concentrated in middle-skill jobs, those that were hardest hit in the recession. In the second phase of the recovery (2012-15), job gains shifted strongly toward high-skill jobs as economic conditions improved. Growth remained weak for low-skill jobs and has yet to return to pre-recession levels. We examine the types of jobs added during the recovery using micro-level data from the Current Population Survey (CPS), commonly referred to as the household survey. Every month, the U.S. Census Bureau collects data on the labor market status of individuals from approximately 60,000 households. We use seasonally adjusted quarterly data for the 2001-15 period and restrict the sample to workers ages 16 to 64 who are not self-employed and not employed in the military or agricultural occupations