However, the curve tracing out this cyclical relationship has drifted upwards (see chart 2).Part of the reason is that employers increasingly want highly educated workers, so those with poor educational levels are ill-equipped for the jobs on offer.
The key contributors are three: 1. Skill-biased technological change that has automated routine work while increasing the demand for highly educated workers with at least a college education, preferably in science, engineering or math.
The fact that productivity is higher for highly educated workers, which gives rise to an educational wage premium, provides incentives for higher education.
Most highly educated workers obtain a pension, while the low-educated ones in many cases have to work until the age of 70 just to qualify for an AP.
"The result is growing disparities in income and employment across the U.S. economy, with highly educated workers enjoying more opportunities and workers with less education facing declining employment prospects and stagnant incomes".
"There will not be enough young adults with a college education to meet the increase in demand for highly educated workers after the baby boomers retire".
This apparent shortage of highly educated workers helps explain the inverse relationship between unemployment risk and education level.
To put it differently, there might be some cyclical 'crowding out', namely a process by which during recessions because of excess labour supply—highly educated workers take the jobs that could be occupied by less-educated ones.
