Low wages, rather than inadequate training, are to blame for the science, technology, engineering and math (STEM) skills gap, according to research from the University of Warwick.

Research carried out by Thijs van Rens, associate professor of economics, suggests that the lack of workers with STEM skills is not due to problems with the educational system, but rather to employers' unwillingness to offer higher salaries to suitably skilled workers.

“It is often taken for granted that the skills gap and skills mismatch is a supply problem, and appropriate training is not available to workers," says van Rens. "However U.S. data shows that market wages do not reflect the relative demand for different types of skills."

"Market wages do not reflect the relative demand for different types of skills," says van Rens. Image credit: University of Warwick.Van Rens used data on job-finding rates, earnings and profits across states, industries and occupations to measure the extent of the skills mismatch in the U.S. labor market, and the underlying factors that gave rise to it.

He suggests that the labor market can adjust to a skills mismatch in two ways: the workforce may adapt to the demand for skills—for instance, by acquiring training or changing occupation—or firms may adapt to the supply of skills. However, he says that for one or both of these to happen, wages must reflect the relative supply and demand for various skills.

Van Rens says that reform of the educational system is not an answer to the perceived lack of appropriately skilled workers. As long as wages do not reward certain skills, he says, workers will be less likely to acquire them. And, even if they do, those workers will find employment in higher-paid occupations that do not use the skills.

“While firms complain about a shortage of qualified physicists and engineers on the labor market, a very large number of graduates in these fields work in the financial sector, where they only use their STEM skills to a very limited degree," van Rens says. “Encouraging universities to educate more physicists and engineers will not make any difference if these additional STEM graduates look for jobs in investment banks.”