Economic development often founders on a mismatch between available workforce skills and companies’ needs. A tool that analyzes critical sets of labor market data not previously considered in tandem can help local governments improve planning.Labor market ; Labor market - Massachusetts ; Occupational training ; Occupational training - Massachusetts

Alan Clayton-Matthews

Barry Bluestone

Mark Melnik

English

Research Papers in Economics

14    Winter 2009
The  conventional  wisdom  holds  that  as 
the U.S. economy shifts toward high-skill 
industries based on information and knowl-
edge, individuals with limited formal edu-
cation and skill will increasingly fail to find 
jobs that pay an adequate wage—or may 
not be able to secure employment at all. It 
is a particular concern in large urban areas, 
where many emerging industries are located 
and where numerous workers have not gone 
beyond high school. Embedded in the con-
ventional wisdom is the assumption that an 
overwhelming number of the available jobs 
in these new industries are skewed toward 
the high-skill end of the labor force. 
A New Labor Market Tool
Testing the conventional wisdom requires 
an analysis of two sets of labor market data 
that are seldom linked: the occupational dis-
tribution of specific industries, and the edu-
cation and skill distribution of occupations 
in each industry. Combining information 
on these two distributions was the objec-
tive of a project that the Center for Urban 
and Regional Policy (CURP) at Northeast-
ern  University  designed  in  collaboration 
with the Boston Redevelopment Authority 
(BRA) Research Division.1 The result is the 
Labor  Market  Assessment  Tool  (LMAT), 
a data-rich computer program designed to 
estimate  the  education  and  skill  require-
ments of any industry in the United States 
and match them to the labor force charac-
teristics of any city, any region, or the nation 
as a whole. 
LMAT combines in one software appli-
cation a variety of data sources. It permits a 
labor market analysis that, first, aggregates 
employment in a specific industry (or a set 
of  industries);  second,  translates  the  data 
into a complete distribution of employment 
by detailed occupation; third, describes the 
specific  human  capital  requirements  for 
each detailed occupation; and finally, aggre-
gates all the data into education and skill 
requirements for all the jobs in a specific 
industry.2  LMAT  lets  workforce  develop-
ment policymakers improve their decision 
making significantly.
LMAT has been tested in Massachu-
setts. The U.S. Occupational Employment 
Statistics  (OES)  and  the  Massachusetts 
Department of Unemployment Assistance 
(DUA) provide the data that LMAT uses 
to estimate the employment distribution by 
occupation for each industry. The Occupa-
tional  Information  Network  (O*NET),  a 
survey-based data system, includes informa-
tion on the education, skill, and language 
An Assessment Tool Is Launched
Needed Skillsversus
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cost at www.bos.frb.org/commdev/c&b/index.htm.Communities & Banking    15
requirements  of  the  current  workforce  in 
each occupation. The U.S. Census provides 
data on the educational attainment of the 
workforce for any particular locality. Fore-
casts from the U.S. Bureau of Labor Statis-
tics and DUA provide information on the 
likely aggregate employment levels for par-
ticular industries over the next decade.
Matching People 
with Industries
Broadly, the goals of the LMAT program 
are to:
1.   Estimate the number of jobs by educa-
tion and skill level in a new company on 
the basis of the typical occupational dis-
tribution of its industry.
2.   Approximate the number of workers in 
the surrounding community who could 
qualify for jobs in companies that expand 
operations or establish a new facility in a 
neighborhood or city.
3.   Determine  the  additional  schooling  or 
training needed to increase the size of the 
qualified pool of workers.
4.   Assess  the  difference  between  the  edu-
cational attainment of the current labor 
force  and  the  expected  educational 
requirements for future labor markets. 
5.   Isolate the prevalence of a key skill need-
ed or a set of skills, such as math, science, 
or language, in selected industries.
6.   Estimate the wage distribution for future 
labor market scenarios by education and 
skill requirements. 
Although  the  LMAT  computer  pro-
gram is new, its potential is clear. For exam-
ple, it can simulate labor market scenarios 
on the basis of a metropolitan region’s abil-
ity to attract various industries. Or it can 
be used to analyze whether there is a mis-
match between an industry’s human capital 
needs and an area’s labor-supply characteris-
tics. It can also help to isolate future educa-
tion and training requirements for projected 
new jobs. 
A Boston Example
One example of how LMAT has been used 
is a report the BRA Research Division pro-
duced regarding the current and future val-
ue of English skills in Greater Boston’s labor 
market.3 
The topic has important implications. 
Recent  immigration  helped  the  region 
avoid a net population loss at the time of 
the last census.4 Moreover, as baby boom-
ers approach retirement, immigrant workers 
will be needed to fill critical job vacancies. 
An Assessment Tool Is Launched
Available Skills versus
by Mark Melnik, Boston Redevelopment Authority 
Barry Bluestone, Northeastern University
Alan Clayton-Matthews, University of Massachusetts, Boston
istockphoto16    Winter 2009
The BRA research using LMAT found 
that the most likely industry/occupation dis-
tribution in 2014 will require greater Eng-
lish language proficiency. Additionally, the 
few jobs expected to grow that require only 
limited English language skill are among the 
lowest paying in the current labor market. 
The study looked at the language skills 
required  for  the  jobs  likely  to  be  created 
between  2004  and  2014.  (See  “Language 
Requirements  for  Greater  Boston  Jobs, 
2004 vs. 2014.) The researchers predicted 
that although only 17 percent of the jobs in 
2004 required a high level of English skill, 
by 2014, 32 percent would. The share of 
jobs for which the lowest level of language 
proficiency  was  sufficient  would  shrink 
from 19 percent of 2004 jobs to 3 percent 
of the new jobs. 
Moreover,  new  jobs  requiring  only 
minimum  language  proficiency  would 
pay  about  $18,000  a  year,  well  below   
the  $25,000  for 
comparable  2004 
jobs.5 (See “Expect-
ed  Annual  Wag-
es  by  Language 
Proficiency,  2004 
vs.  2014.”)  New 
jobs  requiring  the 
highest  language 
proficiency  were 
predicted to pay an 
average  of  $4,000 
more than the 2004 
set  of  such  jobs. 
This indicates that among the jobs requiring 
advanced English skills, the highest paying 
jobs are the ones expected to grow the most. 
However, among the jobs requiring limited 
English skills, the lowest-paying jobs are the 
ones expected to grow the most. According 
to LMAT, 93 percent of jobs expected to be 
created in Greater Boston over the next 10 
years  will  require  at  least  modest  English 
language skills. 
The LMAT information points to two 
key policy concerns. First, Greater Boston 
faces  a  potential  skills  mismatch  between 
the language skill requirements for expected 
new jobs in the labor market and the grow-
ing  immigrant  population.  Second,  the 
increasing pay disparity between workers of 
different language ability suggests one rea-
son why wage inequality is increasing in the 
region. Taken together, the data underscore 
the importance of language training both 
for Greater Boston’s immigrants and for the 
long-term health of 
the economy.
Implications
Information regard-
ing  industry  needs 
today  and  in  the 
near  future  can 
be  vital  in  guid-
ing  the  curricu-
lum at community 
colleges  and  else-
where.  Specifically, 
LMAT  can  iden-
tify the main skills 
needed  in  growth 
industries  and  iso-
late  those  skills 
by  projected  job 
growth, educational 
requirements,  and 
estimated  training 
time.  LMAT  can 
be  used  to  examine  nearly  140  different 
measures of job requirements.6
Armed with LMAT information, gov-
ernment and schools can tailor workforce 
training  programs  by,  for  example,  iden-
tifying  skills  needed  for  occupations  that 
require an associate’s degree or less in the 
growing life sciences industry. Data regard-
ing occupations available to modestly skilled 
workers  in  emerging  industries  would  be 
invaluable  to  community  leaders,  elected 
officials, social service providers, and aca-
demics, and could help prepare our work-
force for the economy of the future.
Mark Melnik is the deputy director of re-
search at the Boston Redevelopment Authority. 
Barry Bluestone is dean of the School of So-
cial Science, Urban Affairs, and Public Policy 
and director of the Center for Urban and Re-
gional Policy at Northeastern University. Alan 
Clayton-Matthews is an associate professor 
at the John W. McCormack School of Public 
Policy, University of Massachusetts, Boston.
Endnotes
The BRA Research Division analyzes contemporary, 
1 
historical,  and  comparative  data  related  to  Boston’s 
economy, population, and markets. It plays a critical 
role in informing public policy for the City of Boston 
related  to  community  and  economic  development, 
and  planning.  It  also  is  a  resource  for  Boston 
residents, private-sector groups, academic institutions, 
community-based  organizations,  and  other 
governmental agencies. CURP is a “think and do tank” 
that  brings  together  Northeastern  faculty,  staff,  and 
students to research a range of topics related to urban 
areas, focusing primarily on Greater Boston. CURP 
often works with community groups, nonprofits, and 
government agencies to collect and analyze data and 
inform public policy decisions.
Mark Melnik and Alvaro Lima, 
2  Introducing the Labor 
Market Assessment Tool (Boston: Boston Redevelopment 
Authority Research Division, November 2008).
Mark Melnik, Alvaro Lima, and Jeremy B. Thompson, 
3 
Revisiting  Language  Skill  Requirements  in  the  Labor 
Market  (Boston:  Boston  Redevelopment  Authority 
Research Division, April 2008).
For example, see Andy Sum et al., 
4  The Changing Face 
of Massachusetts (Boston: MassINC, June 2005).
All wages in the BRA report are in 2006 dollars.
5 
LMAT  uses  O*NET  data  regarding  Skill  and 
6 
Knowledge requirements. O*NET collects data on 35 
different skill categories and 33 different knowledge 
categories,  each  measured  on  two  different  scales. 
Additionally,  LMAT  uses  O*NET  data  related  to 
educational  and  training  requirements.  See:  http://
online.onetcenter.org/.  
Expected Annual Wages by Language Proficiency   
2004 vs. 2014
Language Skill Current Jobs New Jobs
Low $25,043  $17,998 
Medium-Low $33,145  $29,079 
Medium-High $53,680  $57,930 
High $71,117  $74,109 
Source: Boston Redevelopment Authority, LMAT Analysis for Greater Boston
0
10
20
30
40
50
Language Requirements 
for Greater Boston Jobs, 2004 vs. 2014
low medium-
low
high medium-
high
percent
7
41
19
17
30
34
20
32
Percent of 2004 jobs
Percent of 2014 jobs
Source: Boston Redevelopment Authority, LMAT Analysis for Greater Boston
Level of Language Skill Needed

Needed skills versus available skills: an assessment tool is launched

http://www.bostonfed.org/commdev/c&b/2009/winter/Bluestone_workforce_needs_assessment.pdf

Needed skills versus available skills: an assessment tool is launched

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