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Recent reports highlight new findings on educational attainment

February 22, 2018

Three recent news items shed important light on educational attainment and economic well-being and one promising approach to increasing educational attainment among lower income people. While the Pew Research Center finds the share of college-educated young adults in the U.S. workforce is higher than ever before, the Economist reports that the “return on investment” in getting a college degree is leveling off. And as the number of individuals holding a degree and participating in the workforce increases, so has the number of jobs that now require higher credentials even though those requirements may not be necessary.

The Pew Research Center has reported that the share of college-educated young adults in the workforce in the U.S. is higher than ever before (40 percent of employed 25- to 29-year olds in 2016). And The Economist reports that it is a phenomenon that is being observed in many countries around the world, including Canada, Japan and South Korea. However, the assumption that such degrees will help boost economic growth and social mobility is not necessarily true, The Economist holds.

The evidence shows that the “return on investment” in higher education — the boost to lifetime earnings from having a degree — has leveled off at around 15 percent per year, but the report cautions that even this premium is flawed as it does not account for unequal wages, different careers and different places. However, The Economist, in looking at World Bank estimates of the return from 139 different economies, does say it “is substantial everywhere.”

The article goes on to say there is only a weak link between higher shares of graduates in an occupation and higher salaries and many workers in America (two-thirds of those with degrees) are doing work that was mostly done by non-graduates 50 years ago.

If having a college degree is becoming more of necessity just to gain a job, helping workers attain such credentials is more important. A recent initiative was undertaken by the Center for Advancing Opportunity, the Thurgood Marshall College Fund, the Charles Koch Foundation, Koch Industries and Gallup, to understand perceived barriers to opportunity and create evidence-based solutions. It looked at higher education among “fragile communities,” which the authors defined as areas with high proportions of residents who struggle financially and have limited opportunities for social mobility.

Their initial report, The State of Opportunity in America noted that while there is high consensus among fragile-community residents that a college education is very important (66 percent) or important (22 percent), just 19 percent of the residents agreed that everyone in the U.S. has access to an affordable college education.

The Hechinger Report recently highlighted a successful program in Arkansas that addresses the issue of access to college degrees for low-income parents. The Arkansas Career Pathways Initiative (CPI) started 11 years ago and has enrolled close to 30,000 low-income, mostly single parents. Participants must be eligible for the federal welfare program TANF (Temporary Assistance for Needy Families).

Between 2006 and 2013, 52 percent of CPI participants earned a certificate or a degree, compared with 24 percent of community college students who weren’t in the program. CPI participants were also shown to have increased earnings, which led to savings from decreased public assistance, and a report calculated a 179 percent return on the state’s initial investment in the program. Begun in 2006, the CPI program has been supported by both Democrat and Republican governors and legislatures in Arkansas since its inception and may serve as a model for other states.

Arkansashigher ed