Upskilling: Do Employers Demand Greater Skill When Skilled Workers are Plentiful? 

Like most downturns, the Great Recession was particularly painful for low-skilled workers. From 2007 to 2012, the unemployment rate rose by 6.4 percentage points for workers without a college degree relative to an increase of only 2.3 percentage points for the college educated. This differential impact was evident within occupations as well. During the recession, college educated workers were 2 percentage points less likely to be unemployed, even after controlling for their initial occupations. One potential explanation is the ability of unemployed, high-skilled workers to take middle- and low-skilled jobs during the downturn. Indeed, from 2007 to 2012 the share of workers with a college degree in traditionally middle- skill occupations increased rapidly, as is shown in Figure 1. This growth in skill requirements within occupations has colloquially become known as “up-skilling.”