Where I mix career information and career decision making in a test tube and see what happens

Wednesday, August 25, 2010

Measuring the Importance of Postsecondary Education

One of the purposes of my forthcoming book, 2011 Career Plan: The Best Moves Now for a Solid Future, is to exhort the reader to get additional education or training as preparation for a career move. I describe several routes to career entry, such as on-the-job training, postsecondary technical school, and college degrees. Although I mention the advantages and disadvantages of each skill-building route, I don’t point to any single route as best for all people. That would certainly be bad guidance. But the point is that some education or training beyond the high school diploma is vital. (I make the same point in another book, Quick Education and Training Options Guide, which is due out in October.)

This argument gains a lot of reinforcement from a fascinating research study from Georgetown University’s Center on Education and the Workforce: Help Wanted: Projections of Jobs and Education Requirements Through 2018. (You can get the PDF of the full report or the executive summary at http://cew.georgetown.edu/jobs2018/.)

The report, by Anthony P. Carnevale (full disclosure: he was a colleague of mine at Educational Testing Service), Nicole Smith, and Jeff Strohl, forecasts the demand for workers with various levels of education. The researchers show that the jobs (that is, paid positions, not occupations) normally requiring an associate degree or higher increase from 28% of the total mix in 1973 to 56% in 1992, 59% in 2007, and a projected 62% in 2018. Over the same interval, the fraction of jobs for people with only a high school diploma falls from 40% to 28%, and for high school dropouts from 32% to 10%.

They also show that postsecondary education is increasingly important for entering or staying in the middle class, which they define as the middle four deciles of household earnings. In 1970, 46% of high school dropouts and 60% of high school graduates were in the middle class. By 2007, these proportions had dropped to 33% and 45%. There was also some erosion among college grads, as people with the bachelor’s went from being 47% in the middle class to 38%. But the bachelor’s-holders were moving upward, not downward. The percentage of bachelor's-holders in the upper three deciles of household earnings increased from 37% to 48%. Similar changes can be seen in those with a graduate degree.

Looking at wage trends, they found that from 1983 to 2008, among prime-age workers between the ages of 25 and 54, earnings increased by 13% for high school grads compared to 15% for those with an associate degree, 34% with a bachelor’s, and 55% with a graduate degree. Over a lifetime, they estimated earnings (in current dollars) of $1,767,025 for high school grads, but almost double that ($3,380,060) for those with a bachelor’s.

The researchers point to the changing nature of our economy, only accelerated by the Great Recession, as the force that is increasing the demand for--and remuneration of--workers with postsecondary education.

They also make a related point: that our current postsecondary educational system will not produce enough workers to meet this demand. This idea goes beyond the purview of 2011 Career Plan and therefore doesn’t get a full discussion in this blog. Nevertheless, it’s a very important point, and I may return to it in a future blog.

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