Increased globalization places competitive pressures on firms heavily involved in international trade. To be successful, firms must be innovative and productive—two attributes that rely greatly on a skilled workforce. Key in the toolbox of productive workers are science, technology, engineering and mathematics (STEM) skills. However, STEM skills are often not enough to generate significant productivity on their own. Indeed, the complementarity between STEM and non‑STEM skills (such as communication and management skills) has been noted as a key driver of innovation and productivity.
Overall, labour productivity growth in the United States has outpaced that in Canada over the past several decades. This is despite the fact that Canadians are more skilled than Americans in literacy, numeracy and problem solving in a technology‑rich environment (Statistics Canada 2013). However, workers’ skills are not always used in the workplace. Many factors may come into play, including the level of capital investment, which may influence the capital–labour ratio international trade agreements, which affect international product demand the distance between major urban centres and other issues that may affect the quality of job match. Moreover, workers tend to employ many other skills in the workplace (Frenette and Frank 2017).
The study combines two data sources to compare the skill level required in Canadian and American jobs.
The first is the Programme for the International Assessment of Adult Competencies (PIAAC), which was developed by the Organisation for Economic Co‑operation and Development (OECD). The PIAAC survey data were collected from November 2011 to June 2012 and contain results from assessments in literacy, numeracy and problem‑solving in a technology‑rich environment (PS‑TRE). They also contain key demographic information on respondents such as sex, immigrant status, age, highest level of educational attainment, field of study and current occupation. For international comparability, the occupation was coded according to the International Standard Classification of Occupations, 2008 (ISCO‑08).
Skill level requirements were attached to each PIAAC respondent’s ISCO‑08 occupation code according to data from the Occupational Information Network (O*NET). The O*NET database was developed by the U.S. Department of Labor and contains job skill level requirements for each 2010 Standard Occupational Classification (SOC) code. The skill level requirements were determined using the results of a survey of job incumbents. Job incumbents in each occupation were asked to rate skill levels for their job on a scale of 1 to 7 with the assistance of examples for specific values. These results were micro‑edited by job analysts with specialized knowledge of occupations. If over 75% of respondents rated a skill as “not important,” the job analysts rated the skill as “not relevant” for the occupation. In this study, such skills were assigned a level of 0. In total, this study examines 35 job skills in both STEM areas and non‑STEM areas.
The skill level ratings from the O*NET database were attached to the PIAAC data at the occupational level after the 2010 SOC codes were converted into ISCO‑08 codes with a concordance file created by the U.S. Bureau of Labor Statistics.
The analytical sample consists of current paid employees aged 25 to 65. Individuals under age 25 were dropped from the sample to minimize possible selection issues associated with the decision to work or go to school. These sample restrictions resulted in a sample of 16,589 Canadian workers and 2,958 U.S. workers.
The study finds that the skill level of Canadian jobs is significantly higher than that of American jobs in 30 of the 35 areas examined. The Canadian advantage is particularly large in STEM and other technology‑related skill areas. In these areas, the relatively larger proportion of non‑university graduates in engineering, manufacturing and construction, and the higher numeracy proficiency in Canada account for almost all of the gap in skill level. The one group facing lower skill requirements in Canada is university graduates. In general, the jobs that they hold require lower reading comprehension, writing, social and management skills compared to their counterparts in the United States.
Chosen excerpts by Job Market Monitor. Read the whole story at Are Canadian Jobs More or Less Skilled than American Jobs?