THE EDUCATION OF AMERICAN WORKERS

Education is an investment in skills, and like all investments, it involves both costs and returns. The cost to the student of finishing high school is quite low. However, the cost to the student of attending college is higher because it includes tuition, books, fees, and the earnings a student potentially gives up either by not working at all during college or by working only part-time. However, according to a report by Kathleen Porter of the ERIC Clearinghouse on Higher Education (“The Value of a College Degree,” ERIC Digest, 2002, http://www.ericdigests.org/2003-3/value.htm), over an adult's working life, those with a high school degree will earn on average $1.2 million, those with an associate's degree will earn an average of $1.6 million, and those with a bachelor's degree will earn about $2.1 million. These figures put the costs of higher education in perspective. In addition, it is important to remember that while the returns from a high school or college education can be measured economically, there are invaluable social, emotional, and intellectual returns as well.

Although some returns from education accrue for the individual, others benefit society and the nation in general. Returns related to the economy—specifically the labor market—include better job opportunities and jobs that are less sensitive to general economic conditions. Other societal returns often attributed to higher education include a greater interest and participation in civil affairs among well-educated individuals. Porter also noted that individuals with higher educational attainment contribute more to general tax revenues, are more productive, and are less likely to rely on governmental financial support, all important benefits for society as a whole.

A BETTER-EDUCATED NATION

American workers are better educated than ever before. Before the end of World War II (1939–1945), with the exception of doctors, lawyers, engineers, teachers, and a few other professionals, only a small number of people earned higher degrees for the purpose of preparing for a career or vocation. Most colleges were private, four-year schools with limited enrollments. Therefore, a person who wanted training for a job or an occupation usually went to a vocational high school or became an apprentice, learning a trade from a highly skilled mentor.

The G.I. Bill of Rights, introduced after World War II, changed the way Americans viewed higher education. The soldiers, sailors, and pilots returning to civilian life wanted to make better lives for themselves, and the U.S. government was willing to pay to give them the chance. Federal money paid to America's returning veterans opened up and enlarged trade and vocational schools and filled college classrooms across the nation.

Approximately 2.2 million veterans, or about one-third of all American veterans returning from World War II, enrolled in colleges and universities under the G.I. Bill between 1944 and 1960, according to Jennifer Ann Adams of Pennsylvania State University in “The G.I. Bill and the Changing Place of U.S. Higher Education after World War II” (November 18, 2000, http://www.personal.psu.edu/jaa144/ashe2000.PDF). This influx of students represented a massive democratization of education. Existing colleges and universities expanded, and nearly 1,700 new institutions were founded across the nation during the fifty years following the passage of the G.I. Bill. Most of these schools were two-year colleges, providing a new option in higher education for many people. In the postwar period, American colleges, universities, and junior colleges graduated increasing numbers of engineers, accountants, scientists, business people, technicians, nurses, and others with similar professional and technical careers.

How Well Educated Are Americans?

According to the National Center for Education Statistics (NCES) in Digest of Education Statistics, 2007 (September 2007), significant increases were registered during the twentieth century in the number of years of school completed by students. The median number of school years completed (half of the students completed more, and half completed less) by American students increased from 8.4 years in 1930 to 13 years by 1993. (The NCES no longer publishes data on median number of years completed.) In 1930 fewer than one in five Americans aged twenty-five and over (19.1%) were high school graduates, and only 3.9% held a bachelor's degree or higher. (See Table 4.1.) Since that time these proportions have steadily increased. By March 1970 over half (55.2%) of adults aged twenty-five and over had completed high school, and 11% had a bachelor's degree. By 1990 more than three-quarters (77.6%) of adults had a high school diploma, and over one in five (21.3%) had a bachelor's degree. By March 2007, 85.7% of all adults aged twenty-five and over had completed high school, and over a quarter (28.7%) had a bachelor's degree or higher. These percentages were the highest recorded since statistics began to be compiled in 1910.

Who Is in College?

In 1970, 8.6 million high school graduates were enrolled in degree-granting institutions including colleges and universities. By 2006, 17.7 million people were enrolled in degree-granting institutions. Projections by the NCES in Digest of Education Statistics, 2007 estimate that in 2011, enrollment will surpass 19.1 million, and by 2016, 20.4 million students will be enrolled in college, graduate, or professional school. (See Table 4.2.)

GENDER. Not only have enrollment numbers burgeoned, but the demographic characteristics of students—including gender, age, and minority status—have shifted. Since the 1970s a dramatic change has been seen in the gender makeup of fall enrollees at degree-granting institutions. In 1970 male students predominated on college campuses; 5 million of the 8.6 million (58.8%) fall enrollees that year were males. A decade later females outnumbered males on college campuses; 6.2 million of the 12.1 million enrollees (51.4%) were females that year. This trend of increasing proportions of female enrollment continued through subsequent years. By 2000, 8.6 million of 15.3 million (56.1%) college or graduate students were female. In 2006, 10.2 million college or graduate students were female, compared with 7.5 million males; females made up 57.7% of enrollment. This trend is expected to continue. The NCES projects that in 2016, 12.2 million of 20.4 million enrolled students, or 59.8%, will be females. (See Table 4.2.)

Increased female enrollment has contributed to over-all growth in college enrollment. From 1990 through 2006 male enrollment increased from 6.3 million to 7.5 million, an 18.9% increase, while the number of females rose from 7.5 million to 10.2 million, a 35.4% increase. Between 2006 and 2016 female enrollment is projected to rise from 10.2 million to 12.2 million, an increase of 19.8%, while male enrollment is expected to rise from 7.5 million to 8.2 million, an increase of only 10.1%. (See Table 4.2.)

OLDER STUDENTS. Since 1970 there has been a significant increase in the percentage of older students enrolled in college. In 1970, 1.1 million students were between the ages of twenty-five and twenty-nine, 487,000 were between the ages of thirty and thirty-four, and 823,000 were aged thirty-five or older. (See Table 4.2.) These nontraditional students made up 27.8% of the 8.6 million students enrolled in degree-granting institutions that year. By 2006, 2.5 million students were between the ages of twenty-five and twenty-nine, 1.3 million were between thirty and thirty-four years old, and nearly 3.1 million were aged thirty-five and older. By that year, these older students made up 38.9% of the student bodies.

The increased enrollment of older students may reflect the higher education levels required by many occupations and the return to school of those who had previously left school to work. Historically, older students generally begin or return to degree programs in order to handle involuntary career transitions or to upgrade their skills in order to advance at their current jobs or prepare to seek new employment.

MINORITY ENROLLMENT. The enrollment of minority students (African-Americans, Hispanics, Asians, Pacific Islanders, Native Americans, and Alaskan Natives) in higher education has been rising steadily. In 1970, of the 1.4 million students who had recently completed high school and then enrolled in degree-granting institutions, 1.3 million (89.7%) were non-Hispanic whites. By 2006 nearly 1.8 million recent high school completers had enrolled in college, and only 1.2 million of them (69.7%) were non-Hispanic whites. In that year, there were 177,000 African-American recent high school completers who were enrolled in college (10%) and 222,000 Hispanic recent high school completers who were enrolled in college (12.5%). Probably most of the remaining 7.8% of the recent high school completers enrolled in college were Asians. (See Table 4.3.)

Although non-Hispanic white students still comprise a large majority of college students (11.5 million of 17.5 million students in 2005), the trend is toward more racial and ethnic diversity on campuses. The NCES reported in Digest of Education Statistics, 2007 (http://nces.ed.gov/programs/digest/d07/tables/dt07_216.asp) that in 1976 white students made up 82.6% of higher education enrollment. In 2005, of the 17.5 million people attending college, 65.7% were non-Hispanic whites, 12.7% were African-Americans, 10.8% were Hispanics, 6.5% were Asians/Pacific Islanders, and 1% were Native Americans.

NCES statistics further reveal that enrollment of minority students increased at a faster pace than the enrollment of non-Hispanic white students between 1976 and 2005. The number of non-Hispanic white students rose from 9.1 million in 1976 to 11.5 million in 2005, an increase of 26.7%. The number of African-American students rose from 1 million in 1976 to 2.2 million in 2005, an increase of an astounding 114.3%. Other minority groups increased their enrollment by even higher proportions. In 1976, 76,000 Native Americans were enrolled in college; by 2005 that number had risen to 176,000, an increase of 131.6%. In 1976, 383,000 Hispanics were enrolled in college; by 2005 that number had risen to 1.9 million, an increase of 391.4%. The number of Asian/Pacific Islander students increased from 197,000 in 1976 to 1.1 million in 2005, an increase of 475.6%.

Types of Degrees

Students can earn a variety of vocational certifications and college degrees in institutions for higher education. Associate degrees are usually awarded by junior colleges or community colleges after about two years of course work. Private institutions, as well as government-funded community and junior colleges, award vocational degrees. These degrees prepare people for specific jobs, such as court reporter, legal assistant, or computer programmer. Bachelor's degrees usually take a minimum of four years to complete, and typically include a broader liberal arts education in addition to training for a particular career. Private and public universities also award advanced master's, doctoral, or professional (doctor or lawyer) degrees. These advanced degrees prepare students to enter a specific profession.

HOW MANY? At the end of the 2005–06 school year, according to the NCES in Digest of Education Statistics, 2007 (http://nces.ed.gov/programs/digest/d07/tables/dt07_266.asp), a total of 713,066 associate degrees (557,134 from public institutions and 155,932 from private institutions) and nearly 1.5 million bachelor's degrees (955,369 from public institutions and 529,873 from private institutions) were awarded. In addition, 594,065 master's degrees, 87,655 first professional degrees, and 56,067 doctoral degrees were awarded.

Just as women have increased their enrollment in college, they have also increased as a proportion of those receiving degrees. In 1976–77, 494,424 of 917,900 bachelor's degrees conferred (53.9%) were awarded to males. By 2005–06 only 630,600 of nearly 1.5 million degrees conferred (42.5%) were awarded to males. (See Table 4.4.) In Digest of Education Statistics, 2007, the NCES further reported that while six out of ten master's degrees awarded in 2005–06 were awarded to women (356,169 of 594,065 master's degrees awarded), slightly more men than women received first professional degrees (44,038 males and 43,617 females) and doctoral degrees (28,634 males and 27,433 females), although women were closing the gap.

Despite their increasing enrollment in higher education, African-American and Hispanic students were under-represented in attaining four-year college degrees. According to NCES data released in Digest of Education Statistics,

2007, in the 2005–06 school year only 9.6% of all bachelor's degrees were awarded to African-Americans and only 7.2% were awarded to Hispanics. These proportions were lower than the proportions of minority students among those who had recently completed high school and enrolled in college, indicating that African-American and Hispanic students were more likely to drop out of college than their non-Hispanic white counterparts. (See Table 4.4.) Similarly, minorities were underrepresented at the master's, doctoral, and first-professional degree levels.

According to the NCES, of the nearly 1.5 million bachelor's degrees conferred during the 2005–06 school year, by far the largest number, 318,042 (21.4%), were awarded for business; in addition, 161,485 (10.9%) were awarded for social sciences and history, and 107,238 (7.2%) were for education. Computer and information sciences accounted for 47,480 bachelor's degrees (3.2%), down from a high of 59,488 awarded in 2003–04. More than 55,000 bachelor's degrees (3.7%) were awarded for English language and literature, 88,134 (5.9%) were awarded in psychology, and 91,973 (6.2%) were awarded in the health professions and related clinical sciences. (See http://nces.ed.gov/programs/digest/d07/tables/dt07_261.asp for historical data on numbers of degrees conferred by discipline.)

LABOR FORCE PARTICIPATION

Data gathered by the NCES show that adults with higher levels of education are more likely to participate in the labor force than those with less education. As reported in Digest of Education Statistics, 2007, about 85.9% of adults with a bachelor's degree between the ages of twenty-five and sixty-four participated in the labor force in 2006, compared with 76.5% of high school graduates who had not gone on to college and just 63.8% of those who had not completed high school. (See Table 4.5.)

The labor force participation rate varied by gender and race/ethnicity. Nine out of ten (91.8%) males ages twenty-five to sixty-four who had earned a bachelor's degree or higher participated in the labor force, compared with only about eight out of every ten (80.2%) females. Only half (49.1%) of females who had not completed high school worked, compared with 76.9% of males. Two-thirds (68.3%) of females who had completed high school worked, compared with 84.5% of males. These figures represent the greater likelihood that women will stay home to care for children or elderly relatives, regardless of educational attainment, although women with lower levels of education are more likely to remain out of the labor force than are women with more education. (See Table 4.5.)

African-Americans with a college degree were more likely to participate in the labor force (87.9%) than non-Hispanic whites (86.2%), Hispanics (85.6%), or Asians (81.8%) with college degrees in 2006. However, among high school graduates, African-Americans were least likely to be participating in the labor force (73.8%), compared with Asians (74%), non-Hispanic whites (76.8%), and Hispanics (78.9%). (See Table 4.5.)

As might be expected, NCES data also reveal that people with lower levels of education are more likely to be unemployed than those with higher levels of education. Digest of Education Statistics, 2007 reveals that the unemployment rate for adults aged twenty-five and older who had not completed high school was 6.8% in 2006. In comparison, only 4.3% of those who had completed high school were unemployed, as were 2% of those who had attained a bachelor's degree or higher. (See Table 4.6.) Unemployment was a bigger problem among less-educated African-Americans twenty-five years of age or older than it was for those in other racial or ethnic groups. As Table 4.6 also shows, African-American adults aged twenty-five and older in 2006 who had not completed high school had the highest percentage of unemployment (13%), compared with non-Hispanic whites (6.5%), Hispanics (5.5%), and Asians (3.8%).

HIGH SCHOOL DROPOUTS

High school dropouts have significant difficulties successfully entering the job market. Without prior job experience or specialized training, dropouts often have difficulty finding jobs. According to the Bureau of Labor Statistics (BLS) in College Enrollment and Work Activity of 2006 High School Graduates (April 26, 2007, http://www.bls.gov/news.release/pdf/hsgec.pdf), between October 2005 and October 2006 about 444,000 high school students dropped out of school. Only slightly more than half (51.4%) of these youth were in the labor force, meaning they were either employed or they were looking for work, compared with three-quarters (76.4%) of high school graduates who were not enrolled in college. These recent dropouts had an unemployment rate of 23.1%.

Labor force participation rates among high school dropouts varies by gender and race/ethnicity. In 2006 male high school dropouts were more likely than female dropouts to be in the labor force (57.5% and 46.5%, respectively). One reason why the labor force participation rate might be so much lower among female dropouts is that often girls leave high school because they are pregnant; these girls may remain out of the labor force to take care of their infants. In addition, the unemployment rate among male dropouts (19.4%) was lower than among female dropouts (30.6%). (See Table 4.7.)

In 2005, the latest year for which complete data on race and ethnicity were available from the BLS, Hispanic students who had dropped out of high school were most likely to be participating in the labor force (64.3%), followed by non-Hispanic whites (60.3%), and African-Americans (42.5%). (See Table 4.7.)

EDUCATION AND EARNINGS

Many people decide to attend college because they understand that a college degree will help them get a better job and increase their earnings potential. In fact, individuals with a higher level of education are generally more likely to be working, and they are likely to be earning more than those with lower levels of education. As reported by the National Center for Education Statistics in the Digest of Educational Statistics, 2007 (http://nces.ed.gov/programs/digest/d07/tables/dt07_372.asp), in 2006 the median earnings of male college graduates aged twenty-five and over was $55,430, compared with male high school graduates, who earned a median of $33,070, and male high school dropouts, who earned a median of $24,090. (See Chapter 6 for complete discussion of earnings and benefits.)

Although better educated females also make more than their less-educated counterparts, there is a big difference between the earnings of males and females with the same educational background. Males generally earn more than females across all levels of education. The differential is most pronounced at the professional degree level (for example, medical doctor or law school graduate). In 2006 the median annual income of a male aged twenty-five or older with a master's degree was $67,990, whereas the median income for females with the same level of education was $47,590, or 70% of what men earned. Men with doctoral degrees earned a median of $91,050, compared with $60,450 (66.4% of what men earned) for equally educated women. Men aged twenty-five and older with a professional degree secured a median income of $100,000 in 2006; women with the same level of education earned a median income of only $65,110, or 65.1% of what their male counterparts earned.

However, the disparity in pay extends across all education levels. In 2006 female high school dropouts earned a median of $15,160, about 62.9% of what male dropouts earned, while female high school graduates earned a median of $21,610, about 65.3% of what males earned.

Researchers such as Linda Levine of the Congressional Research Service in “The Gender Wage Gap and Pay Equity: Is Comparable Worth the Next Step?” (June 5, 2001, http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1026&context=key_workplace) and Seth Kuhn of Furman University in “Examining a Changing Gender Wage Gap: The Role of Human Capital,” (2006, http://economics.furman.edu/SethKuhnPaper.pdf) conclude that the wage gap cannot be explained by a single factor, but instead is attributable to the interrelated effects of many issues, including continuing discrimination against women that works against promotions and equal pay, the segregation of the female workforce into female-dominated jobs with lower wages, and the effects of females being less committed to staying in the workforce, as they are the family members who usually take time out of the labor force to care for small children.

Beyond the Bachelor's Degree

Having a bachelor's degree opens the door to many occupational options, but a degree itself does not guarantee that a graduate will enter a high-paying career. In general, graduates who major in business, computer sciences, and engineering will find that occupations in their subject areas pay higher salaries than do occupations in education, the humanities, and social and behavioral sciences. For example, the median weekly earnings of network systems and data communication analysts ($1,039) and network and computer systems administrators ($1,180) were considerably higher than those for elementary and middle school teachers ($863), librarians ($861), salaried writers ($999), or social workers ($757) in 2007. (See Table 6.2 in Chapter 6.)

In fact, the National Association of Colleges and Employers reported in “Year-End Report Shows Salary Gains for Class of 2007” (September 12, 2007, http://www.naceweb.org/press/display.asp?year=2007&prid=264) that the starting salaries for engineers and computer scientists graduating with a bachelor's degree in May 2007 surpassed the median annual earnings of many other professions. Class of 2007 graduates with a chemical engineering degree could expect a starting salary of $59,218 and those with amechanical engineering degree could expect a starting salary of $54,057. Grads with computer science degrees could expect a salary offer of $53,051. In contrast, history majors could expect only $35,092 and English majors could expect only $31,924 to start.

The lifelong earnings potential of a college degree makes a four-year bachelor's degree attractive to both recent high school graduates and adults returning to formal education to advance their careers. In some fast-growing occupational fields, including health care and education, the highest-paying jobs now require formal education beyond the bachelor's degree for entry or advancement. Figure 4.1 presents a list of twenty large-growth occupations that require a master's, doctoral, or first-professional degree for employment, their median annual wages, and the projected change in employment in these occupations from 2006 through 2016. Although the huge growth in available positions for postsecondary teachers reflects expanding college enrollments, most of the other high growth occupations are in the health-care field.

EDUCATION AND POVERTY

In general, as individuals attain higher educational levels, the risk of living in poverty falls markedly. Of all those sixteen years of age and older in the labor force during 2005, those with less than a high school diploma had a much higher poverty rate (14.1%) than did high school graduates (6.6%), according to the BLS in A Profile of the Working Poor, 2005. The lowest poverty rates were reported by workers with an associate degree (3.4%) or bachelor's degree or higher (1.7%). (See Table 4.8.)

Historically, poverty rates are higher for African-American and Hispanic workers than for non-Hispanic white workers at all educational levels. This trend held true in 2005. The poverty rates of African-American and Hispanic high school dropouts were 22.2% and 16.5%, respectively, while the poverty rates of non-Hispanic whites and Asians with comparable education were 13% and 10%, respectively. (See Table 4.8.) Even among those with a bachelor's degree, poverty rates were higher for Hispanics and African-Americans. The poverty rate for African-Americans with a bachelor's degree or higher was 2.7% in 2005; for Hispanics it was 2.6%. On the other hand, the poverty rate for non-Hispanic whites with a bachelor's degree or higher was only 1.5%.