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The 21St Century at Work

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The 21St Century at Work CHILDREN AND ADOLESCENTS This PDF document was made available CIVIL JUSTICE from www.rand.org as a public service of EDUCATION the RAND Corporation. ENERGY AND ENVIRONMENT HEALTH AND HEALTH CARE Jump down to document6 INTERNATIONAL AFFAIRS POPULATION AND AGING The RAND Corporation is a nonprofit PUBLIC SAFETY research organization providing SCIENCE AND TECHNOLOGY SUBSTANCE ABUSE objective analysis and effective TERRORISM AND solutions that address the challenges HOMELAND SECURITY facing the public and private sectors TRANSPORTATION AND INFRASTRUCTURE around the world. U.S. NATIONAL SECURITY Support RAND Purchase this document Browse Books & Publications Make a charitable contribution For More Information Visit RAND at www.rand.org Explore RAND Labor and Population View document details Limited Electronic Distribution Rights This document and trademark(s) contained herein are protected by law as indicated in a notice appearing later in this work. This electronic representation of RAND intellectual property is provided for non- commercial use only. Permission is required from RAND to reproduce, or reuse in another form, any of our research documents. This product is part of the RAND Corporation monograph series. RAND monographs present major research findings that address the challenges facing the public and private sectors. All RAND mono- graphs undergo rigorous peer review to ensure high standards for research quality and objectivity. The 21st Century at Work Forces Shaping the Future Workforce and Workplace in the United States LYNN A. KAROLY, CONSTANTIJN W. A. PANIS Prepared for the U.S. Department of Labor The research described in this report was conducted by RAND Labor and Population. The views expressed herein are those of the authors and do not necessarily reflect the official position of the U.S. Department of Labor. 0-8330-3492-8 The RAND Corporation is a nonprofit research organization providing objective analysis and effective solutions that address the challenges facing the public and private sectors around the world. RAND’s publications do not necessarily reflect the opinions of its research clients and sponsors. R® is a registered trademark. Cover design by Stephen Bloodsworth © Copyright 2004 RAND Corporation All rights reserved. No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from RAND. Published 2004 by the RAND Corporation 1700 Main Street, P.O. Box 2138, Santa Monica, CA 90407-2138 1200 South Hayes Street, Arlington, VA 22202-5050 201 North Craig Street, Suite 202, Pittsburgh, PA 15213-1516 RAND URL: http://www.rand.org/ To order RAND documents or to obtain additional information, contact Distribution Services: Telephone: (310) 451-7002; Fax: (310) 451-6915; Email: [email protected] PREFACE In labor as in other policy domains, government action plays out in a context of powerful trends, some strongly affected by other govern- ment activities and some not. Understanding this context is a pre- requisite to sound policy formation. To aid understanding of the forces impinging on the workforce and workplace of the twenty-first century, the U.S. Department of Labor (DOL) asked RAND to con- duct a study of the future of work. Specifically, we seek to answer two sets of questions about work in the twenty-first century: • What are the major factors that will shape the future of work in the current century and how are those factors likely to evolve over the next 10 to 15 years? • What are the implications of these future trends for key aspects of the future workforce and workplace, including the size, com- position, and skills of the workforce; the nature of work and workplace arrangements; and worker compensation? To address these questions, we take a closer look at three major fac- tors that are expected to shape the world of work in the coming decades: shifting demographic patterns, the pace of technological change, and the path of economic globalization. In doing so, our objective is not so much to predict the future but rather to under- stand key structural forces under way in the economy today, the fac- tors associated with those trends, and whether we can expect such trends to continue or to deviate from their present course. We also aim to identify the implications of those trends and the challenges they pose for decisionmakers in the public and private sectors. iii CONTENTS Preface ......................................... iii Figures ......................................... vii Tables.......................................... ix Boxes .......................................... xi Summary ....................................... xiii Acknowledgments................................. xli Abbreviations .................................... xliii Chapter One INTRODUCTION .............................. 1 The Challenges of Looking to the Future ............. 3 A Guiding Framework ........................... 6 Chapter Two SHIFTING DEMOGRAPHIC PARAMETERS SHAPING THE FUTURE WORKFORCE .......................... 15 Slower Workforce Growth Ahead ................... 17 The Workforce Is Becoming Ever More Diverse ........ 30 The Key Characteristic of the Future Workforce Is Skill ... 44 Addressing the Slowdown in Labor Force Growth ....... 52 Changing Demographics Also Shift Demand for Goods and Services............................... 72 Demographics and the Future of Work .............. 75 v vi The 21st Century at Work Chapter Three THE INFORMATION AGE AND BEYOND: THE REACH OF TECHNOLOGY ................................ 79 The Advent of the Information Age ................. 81 Applications of the “New Biology” .................. 92 Nanotechnology: Revolutionary Technology on the Horizon ............................... 96 How Technology Is Affecting the Workforce and Workplace ............................ 99 Technology and the Future of Work ................. 124 Chapter Four A NEW ERA OF GLOBAL INTEGRATION ............. 127 The Phenomenon of Economic Global Integration ...... 130 Forces Behind Global Economic Integration .......... 151 How Economic Globalization Is Affecting the U.S. Economy, the Workforce, and the Workplace ...... 159 Economic Globalization and the Future of Work ....... 179 Chapter Five IMPLICATIONS FOR WORK IN THE TWENTY-FIRST CENTURY .................................... 183 New Paradigms for the Organization of Production ..... 186 Shifts in Employment Relationships and Where Work Is Performed ................................ 191 Other Workplace Dimensions: Safety, Security, and Privacy .................................. 198 The Changing Nature of Work and the Skill Requirements of Jobs ................................... 200 Supplying the Workforce Needs of the Future ......... 209 Changing the Rewards to Work .................... 217 Conclusions .................................. 221 Bibliography ..................................... 223 FIGURES S.1. Labor Force Participation Rate, by Sex, 1950–2002 ... xvi S.2. Real Private Fixed Investment in Information Technology, 1987–2001 ....................... xxi S.3. Real Median Hourly Wage by Education Level, 1973–2001 ................................. xxiv S.4. U.S. Exports and Imports as a Share of GDP, 1960–2002 ................................. xxvii 1.1. Conceptual Framework ....................... 7 1.2. Female Labor Force Participation Rate, 1900–2002 ... 11 1.3. Patents Granted, 1900–2001 ................... 12 1.4. Exports and Imports as a Share of GDP, 1929–2002 ... 13 2.1. Annual Growth Rates of the Labor Force, 1950–2000, and Projected, 2000–2030 ..................... 18 2.2. Determinants of the Size of the Workforce ......... 20 2.3. Fertility Rate, 1920–2001 ...................... 21 2.4. Labor Force Participation Rate, by Sex, 1950–2002 ... 23 2.5. Labor Force Participation Rate by Sex and Age, 1980–2010 ................................. 25 2.6. Immigration to the United States, 1950–2001 ....... 28 2.7. Age Structure of the Population in 1960, 1980, 2000, and 2020 .................................. 32 2.8. Racial and Ethnic Composition of the Population, 1980–2020 ................................. 39 2.9. Ethnicity and Race Questions on the 2000 Census ... 40 2.10. Fertility Rate by Race, 1981–2001 ................ 41 2.11. Fertility Rate by Hispanic Ethnicity, 1989–2001 ..... 42 2.12. Immigrants by Origin, 1991–2001 ............... 42 2.13. Labor Utilization in Selected Countries, 1998 ....... 53 vii viii The 21st Century at Work 2.14. Labor Force Participation Among Men Age 55-Plus and at Selected Single Years of Age, 1950–2002 ...... 55 2.15. Labor Force Participation Rate by Sex and Marital Status, 1970–2001 ........................... 60 2.16. Labor Force Participation Rate of Women with Children by Marital Status and Age of Youngest Child, 1970–2001 ............................ 61 2.17. Labor Force Participation Among the Disabled, by Sex, 1983–2002 ........................... 68 2.18. Basis for Obtaining Immigrant Visas, 1994–2001 ..... 70 2.19. Composition of Expenditures, by Age Group ....... 73 3.1. Moore’s Law, Predicted and Actual, 1971–2005 ...... 82 3.2. Quality-Adjusted Price Indices for Information Technology, 1970–2001 ....................... 83 3.3. Real Private Fixed Investment in Information Technology, 1987–2001 ....................... 86 3.4. Real Investment in Information Technology by Industry, 1970–2001 ......................... 87 3.5. Information Technology Patents
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