There has been much discussion in recent years about a skills gap in the U.S., driven largely by employer complaints over filling jobs. The term “skills gap” can mean different things. Usually, it refers to a belief that there is something fundamentally lacking in the labor force. In the typical telling of the skills gap story, schools are failing to educate students effectively and are graduating students who do not have the skills employers need, thus creating a basic skills shortfall in the labor force as a whole. Others who talk about a skills gap really are referring to a skills shortage, meaning that at the current market price for labor, employers cannot hire the people they are looking for. The third sense of a gap entails a skills mismatch, and describes parts of the U.S.—for instance, North Dakota, when energy production there skyrocketed—where labor demand is booming but where people in the region do not have matching job skills. A skills gap, skills shortage, and skills mismatch are all different and theoretically could be going on all at once.This seminar, presented by Peter Cappelli, examined various aspects of workforce development: why employer investments in worker training have declined, including the role that tax treatments have played; wage trends; and the value of higher education for the American worker.