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  • DOCUMENT RESUME

    ED 372 262 CE 066 879

    TITLE Labor Shortage Case Studies. Research and Evaluation Report Series 93-E.

    INSTITUTION James Bell Associates, Inc., Arlington, VA.; Lewin-ICF, Fairfax, VA.

    SPONS AGENCY Employment and Training Administration (DOL), Washington, DC. Office of Strategic Planning and Policy Development.

    PUB DATE 93 CONTRACT 99-9-4701-75-077-01 NOTE 303p. PUB TYPE Reports Research/Technical (143)

    EDRS PRICE MFOI/PC13 Plus Postage. DESCRIPTORS Adult Education; Allied Health Occupations Education;

    Career Education; Case Studies; Demand Occupations; Employment Projections; Engineering Education; Engineering Technicians; Engineering Technology; *Engineers; *Home Health Aides; Labor Market; *Labor Needs; *Labor Supply; *Special Education Teachers; Supply and Demand; Teacher Burnout; Teacher Education; *Tool and Die Makers; Trade and Industrial Education; Vocational Education

    ABSTRACT A study assessed labor shortages in the United States

    by conducting case studies of four occupations: special education teachers, paraprofessional home care workers, electrical and electronic engineers, and tool and aie makers. The research approach combined analysis of existing data sources and interviews with individuals knowledgeable about the labor markets for the occupations. Theoretical background on the causes and consequences of labor shortages was examined. Research indicated the presence of occupational shortages in two of the four occupations--special education teachers and home care workers. In these two occupations, labor market conditions were more directly influenced by government intervention and other institutional barriers. Although strongly linked to low wage levels, shortages of home care workers also resulted from an explosive growth in the demand for home health care services and poor working conditions. Shortages of special education teachers were linked to inflexibility in wages, "burnout," and government actions that have increased the demand for these teachers. Labor shortages could result in loss of production of goods and services. Employers were more likely to implement strategies to respond to shortages that involved relatively short-term commitment of resources. Strategies to anticipate or recognize labor shortages and approaches to reduce or eliminate shortages were suggested. (Appendixes include the instrument used with t.ol and die makers.) (YLB)

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    Reproductions supplied by EDRS are the best that can be made from the original document.

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  • Material contained in this publication is in the public domain and may be reproduced, fully or partially, without permission of the Federal Government. Source credit is requested but not required. Permission is required only to reproduce any copyrighted material contained herein.

    ais material will be made available to sensory impaired individuals upon request. Voice phone: 202-2197664 TDD* phone: 1-800-3262577

    Telecommunications Device for the Deaf.

    3

  • Labor Shortage Case Studies

    Research and Evaluation Report Series 93-E

    U.S. Department of Labor Robert B. Reich, Secretary

    Employment and Training Administration Doug Ross, Assistant Secretary

    For Employment and Training

    Office of Strategic Planning and Policy Development Raymond J. Uhalde, Administrator

    1993

    4

  • RESEARCH AND EVALUATION REPORT SERIES

    The Research and Evaluation Report Series presenta :nformation about and results of projects funded by the Office of Strategic Planning and Policy Development (OSPPD) of the U.S..Department of Labor's Employment and Training Administration. These projects deal with a wide range of training, employment, workplace literacy, labor market, and related issues. The series is published under the direction of OSPPD's Dissemination Unit.

    This report in the series was prepared by James Bell Associates, of Arlington, Va., and Lewin-ICF (now Lewin-VHI), of Fairfax, Va., under Department of Labor Contract No. 99-9-4701-75-077-01. The authors are John W. Trutko, of James Bell Associates, and Burt S. Barnow, Any B. Chasanov, and Abhay Pande, of Lewin-ICF.

    Tom NaSeil served as OSPPD's Project, Officer for the study. Others in the Department who provided assistance and guidance included John Heinberg, Bill Showier, Sarah Hoffman, Neal Rosenthal, Ronald Kutscher, Richard Hoff, Dan Ryan, and Gail Porter.

    Malcolm Cohen provided data on employment and earnings, as well as substantive comm;nts on the report. The authors also want to acknowiedge the many individuals and organizations that provided both background information and their views on the labor market conditions within the occupations that are the focus of the document.

    Contractors conducting research and evaluation projects under federal sponsorship are encouraged to express their own judgment freely. Therefore, this report does not necessarily represent the official opinion of the Department of Labor.

    5

  • TABLE OF CONTENTS

    PAGE

    EXECUTIVE SUMMARY ES-1

    CHAPTER 1: INTRODUCTION 1-1

    A. Background on Labor Shortages 1-2

    The Social Demand Model 1-5 2. The Blank and Stigler Model 1-6 3. The Arrow-Capron Dynamic Shortage Model 1-8 4. Other Definitions of Shortages 1-9 5. Summary 1-11

    B. Study Objectives, Scope, and Methodology 1-13

    1. Study Objectives and Scope 1-13 2. Data Collection and Methodology 1-14 3. Structure of the Report 1-17

    CHAPTER 2: CAUSES AND CONSEQUENCES OF LABOR SHORTAGES 2-1

    A. Introduction 2-1

    B. Reasons Why Occupational Labor Markets Are in Disequilibrium 2-3

    1. Increase in the Demand for Labor 2-3 2. Decrease in the Supply of Labor 2-5 3. Restrictions on Prices 2-7

    C. Adjustments to Occupational Shortages by Employers 2-8

    1. Increase Recruiting Efforts 2-9 2. Increase Use of Overtime 2-10 3. Reduce Minimum Qualifications for the Job 2-11 4. Restructure Work to Use Current or New

    Employees in Other Occupations 2-11 5. Substitute Machinery and Equipment for Labor 2-12

    6

  • TABLE OF CONTENTS (CONTINUED)

    PAGE

    6. Train Workers for the Jobs 2-13 7. Improve Working Conditions 2-14 8. Offer Bonuses to New Employees 2-15 9. Improve Wages and Fringe Benefits 2-16 10. Contract Out the Work 2-18 11. Turn Down Work 2-18

    D. Reasons Labor Markets May Adjust Slowly 2-18

    1. Slow Reaction Time by Employers 2-19 2. Slow Response Time by Employers 2-20 3. Slow Reaction Time by Workers 4. Slow Response Time by Workers

    2-21 2-21

    5. Restrictions on Occupational Entry 2-22 6. Continuous Increases in Labor Demand 2-23

    E. Consequences of Labor Shortages 2-24

    F. Implications for the Case Studies 2-25

    CHAPTER 3: CASE STUDY OF SPECIAL EDUCATION TEACHERS 3-1

    A. Description of the Occupation 3-1

    B. Training and Recruitment of Special Education Teachers 3-3

    C.

    D.

    1. Educational Qualifications and Entry Requirements 2. Methods Employers Use to Recruit Teachers 3. Methods Teachers Use to Seek and Obtain Employment 4. Characteristics of Workers in the Occupation

    Employment and Earnings in Special Education Teaching

    1.

    3.

    Employment Trends 2. Earnings Trends

    Average Annual Unemployment Rate

    Factors Contributing to a Labor Shortage

    1. 2. Demand-Side Factors 3.

    Presence of a Shortage

    Supply-Side Factors

    3-4 3-13 3-15 3-16

    3-17

    3-17 3-22 3-26

    3-27

    3-27 3-32 3-35

    7

  • TABLE OF CONTENTS (CONTINUED)

    PAGE

    E. Adjustments to Shortages 3-41

    1. By Employers 3-41 2. By Government 3-45

    F. Conclusions and Recommendations 3-47

    1. Conclusions 3-47 2. Recommendations 3-48

    CHAPTER 4: CASE STUDY OF HOME CARE WORKERS 4-1

    A. Description of the Occupation 4-1

    1. The Home Care Industry 4-2 2. Payors 4-3 3. Employer3 4-8

    B. Training and Recwitment of Home Care Workers 4-11

    1. Training Requirements 4-11 2. Methods Employers Use to Recruit Home Care Workers . . . . 4-16 3. Characteristics of Workers in the Occupation . . . 4-17

    C. Employment and Earnings of Home Care Workers 4-19

    1. Employment Trends 4-19 2. Earnings Trends 4-22

    D. Factors Contributing to a Shortage 4-24

    1. Presence of a Shortage 4-24 2. Demand-Side Factors 4-26 3. Supply-Side Factors 4-29

  • TABLE OF CONTENTS (CONTINUED)

    E. Adjustments to Shortages

    1. By Employers 2. By Advocacy Groups and Coalitions 3. By Government

    PAGE

    4-40

    4-40 4-44 4-45

    F. Conclusions and Recommendations 4-46

    1. Conclusions 4-46 2. Recommendations 4-47

    CHAPTER 5: CASE STUDY OF ELECTRICAL AND ELECTRONIC ENGINEERS 5-1

    A. Description of the Occupation 5-1

    B. Trai