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May 19, 2011

Why College Still Matters

By Peter Sacks                    

A growing chorus of critics says a college education is finished as the ticket to economic success and a middle-class life.

The economy of the future, these critics suggest, actually requires far fewer college-educated citizens, because the U.S. economy is generating tens of thousands of jobs that require little or no higher education. 

In essence, the critics of American higher education policy are challenging the long-standing belief that all U.S. citizens should have a decent chance to pursue a college degree, regardless of what kind of neighborhood they grow up in, what kind of schools are available to them, or whether their parents have university degrees.

Let’s call this the “anti-expansionist” school of education policy.  We may be witnessing the restoration of an elitist vein in the American social contract, a return to an era in which the opportunity to pursue the American Dream should be pre-calculated and socially engineered, restricted to individuals deemed “worthy” of a college education by teachers and others.

A recent and influential essay by Richard Vedder in the Chronicle of Higher Education, “The Great College-Degree Scam,” typifies the critics’ argument. Aided by “a small army of researchers and associates,” Vedder claimed to have unearthed a hidden store of rare but highly revealing data in the bowels of the Bureau of Labor Statistics.

He wrote: “Approximately 60 percent of the increase in the number of college graduates from 1992 to 2008 worked in jobs that the BLS considers relatively low skilled—occupations where many participants have only high school diplomas and often even less. Only a minority of the increment in our nation’s stock of college graduates is filling jobs historically considered as requiring a bachelor’s degree or more.”

The author claims that, despite the this gold mine of damning information, colleges and universities are keeping the wool pulled over the public’s eyes, overselling higher education in order maximize their institutional wealth and power.                                                 

In fact, there is no secret trove of hidden data in the bowels of the Bureau of Labor Statistics archives, to be discovered as if they were a rare archeological find by elite teams of statisticians and researchers. The BLS provides exhaustive quantities of data on the labor force, occupations, and the educational credentials that are associated with thousands of occupations in the BLS database. That is what the BLS does.

When the anti-expansionists argue that most of the jobs in the U.S. economy require workers with less than a bachelor’s degree, this is not news.

It’s virtually certain that we could point to no part of America’s economic history when that claim would not be true. In a static sense, the U.S. economy includes thousands of occupational categories, and scores of these jobs are relatively low-skilled paying relatively low wages. Much like a bell curve, the higher we go up the educational and skills ladder, there are fewer individuals who have attained the educational qualifications and skills to fill these relatively high-paying jobs.

The U.S. economy has always produced many thousands more jobs that require relatively few educational credentials than jobs that require bachelor’s degrees or more. More debatable, however, is whether the opposite will unfold when the nation’s viable workforce consists of people who are far better educated than is the case now.

Thus, if we are concerned about what future education policy should be, we need to examine the anticipated rates of change in occupations and employment. On this score, the BLS data paint an entirely different picture than the bleak scenario of the anti-expansionists.

Look to the Growth Fields

If we consider employment growth rates sorted by the educational and training requirements of occupations, the evidence suggests that pursuing a master’s degree could  be one’s best bet over the next decade.  Between 2008 and 2018, jobs requiring a master’s degree are projected to grow by an average of 21.2 percent, the highest rate of growth for all levels of education and training.

The next highest rate of employment growth are jobs requiring a doctoral degree (20.5 percent), followed by the first professional degree (19.6 percent), and then by the bachelor’s degree at 14.2 percent.

On the other hand, jobs requiring on-the-job vocational training of any length are expected to grow well below the rate of growth for jobs requiring college or university degrees. Indeed, jobs that will be filled by high school graduates whose postsecondary education is limited to on-the-job vocational training are forecast to grow a total of less than 10 percent combined between 2008 and 2018.

In terms of the projected numerical change in employment:

  • Jobs requiring at least a bachelor’s degree are expected to generate the greatest growth, with nearly 6 million new jobs.
  • The next greatest source of numerical growth are jobs requiring short-term on the job training, with 4.2 million new jobs.

To be sure, the numerical change in employment for jobs requiring only on-the-job training will exceed the change in jobs requiring a master’s degree or higher. No surprise there. But here’s something that the anti-expansionists conveniently ignore: the wage differences between jobs requiring on the job training and those requiring bachelor’s degrees and higher.

According to the 2009 U.S. Health and Human Services poverty guidelines, jobs requiring only short-term training will earn annual wages that barely cover the poverty level for a family of four.  Jobs requiring more on-the-job training will pay a family of four enough to cover the poverty level, with about $10,000 a year to spare. The average annual wage for jobs requiring short-term, moderate-term, and long-term training on the job will pay an average of $25,300, $35,100, and $38,791, respectively

By contrast, jobs requiring a bachelor’s degree or more will pay an average annual wage of $62,500, about the same as jobs that require a master’s degree. Jobs requiring a doctoral degree will pay more than $78,000 a year, while jobs needing employees having a professional degree will pay an average wage of $101,699.

Also consider the forecasts for job openings between 2008 and 2018, which is a different measure than total employment growth. The expected job openings for low-paying jobs requiring only short-term training are relatively large, at about 19 million over that period.

But the number job openings for occupations requiring a bachelor’s degree can hardly be dismissed. Based on the BLS data, I calculate that forecasted job openings for occupations requiring a bachelor’s degree will be 17.5 million between 2008 and 2018. In fact, that number exceeds the number of job openings for occupations requiring either moderate amounts of on-the-job training or occupations needing long-term job training.

Finally, the anti-expansionists’ argument suggest that there is a major mismatch in the U.S. economy between the education and training credentials that certain occupations require and the actual educational attainment of job seekers.  They suggest that college graduates are “overqualified” for most jobs.

Using another set of BLS data, I tested this claim. Conveniently, the BLS compiles a matrix of employment data including the minimum level of college education required on the vertical axis; and on the horizontal axis, the agency provides employment data by the actual educational attainment of workers. It is thus straightforward to calculate the percentage of workers who are under-qualified, overqualified, or who are a match in terms of how much college education they have achieved versus the minimum educational requirements of jobs. (5)

My calculations show that for all levels of postsecondary college and university training, the lion’s share of employees have earned educational credentials that match the minimum educational requirements of occupations.  Consider jobs that required a first professional degree in 2008:

  • 87 percent of employees for these jobs attained the educational credentials that matched the job requirements.
  • Some 12 percent were over-qualified.
  •  Zero percent were under-qualified.

For jobs requiring a doctoral degree:

  • 44 percent of employees matched the required credential.
  • 56 percent were actually under-qualified, suggesting that scores of jobs requiring a doctoral degree are being filled by insufficiently trained employees.
  •  Zero percent of jobs were filled by employees who were overqualified.

For jobs needing a master’s degree, 40 percent of employees were a perfect match to job requirements, 49 percent were under-qualified, and 9.5 percent were over-qualified.

As for the bachelor’s degree, the anti-expansionists’ claim appears to be somewhat more credible:

  • About 27 percent of employees with bachelor’s degrees had attained more education than jobs required.
  • Still, that mismatch was dwarfed by the combined percentage of workers who were a match for the positions (43 percent) and who were actually under-qualified for jobs requiring the bachelor’s degree (30 percent).
 
   

If our higher education system is producing too many overqualified college graduates, then the effects of this mismatch ought to be observable in other ways beyond what the BLS data tell us. Do college grads believe that their pursuit of a degree was worth the cost? And are they satisfied with the quality of their undergraduate education?

What’s more, the anti-expansionists’ claims suggest that graduates from working-class families who attended less prestigious institutions -- thus having relatively fewer employment opportunities than peers from more prestigious colleges -- would be significantly less satisfied  that their pursuit of higher education was worthwhile.

Despite the claim that overqualified college graduates are flooding the labor market and taking jobs that do not require college degrees, graduates themselves are telling us, overwhelmingly, that the pursuit of their degrees was well worth it, according to my analysis of data from the U.S. Department of Education’s “Beginning Postsecondary Students Longitudinal Study.”

For example, when I sorted the data by type of institution, according to the “Carnegie” classifications, the percentage of college graduates satisfied with the quality of their education was overwhelming. In fact, almost 90 percent of graduates across all institutions believed their undergraduate effort was worthwhile, compared to 11 percent who believed otherwise.

Here’s a key question: Shouldn’t we expect that the satisfaction of graduates would be closely related to indicators of institutional wealth, prestige and selectivity. Such colleges and universities, after all, produce members of the elite work force. As such, it is reasonable to believe that these graduates are more likely than graduates of less prestigious institutions to believe their college degree was worth the cost and effort. But the real story is more complicated.

Among all levels of admissions selectivity, from very selective to open admissions, graduates of very selective institutions were most satisfied that their pursuit of a bachelor’s degree was worthwhile. While 82.3 percent of graduates of very selective colleges believed their efforts were worth the cost, just 17.7 percent thought not.

But admissions selectivity, in general, does not appear to be a significant factor in graduate satisfaction when we compare institutions of varying levels of selectivity. In fact:

  • 81 percent of graduates of moderately selective institutions reported that pursuing their bachelor’s degree was worth the cost and effort.
  • Graduates of minimally selective colleges were least satisfied that their pursuit of a degree was worthwhile, at 74 percent.
  • Nevertheless, the satisfaction of graduates at moderately selective institutions, as well as open-admission institutions, were nearly equal to the satisfaction of graduates from the most selective colleges and universities.
  • Now is satisfaction related to the field of study pursued? We would expect so, and the evidence supports the expectation:
  • About 78 percent of humanities and liberal arts graduates in 2009 reported that pursuing a bachelor’s degree was worthwhile.
  • Some 89 percent of engineering graduates believed so.
  • Graduates of health occupations (85.2 percent), Education (87.3 percent), and technical fields (86.9 percent) were among the most satisfied that benefits of their degree were worth the cost.

Let’s sort this data more narrowly still. How does the type of institution and admissions selectivity affect whether graduates of a given major think their pursuit of a degree was worthwhile?

Again, the critics’ argument implies that marginal students are matriculating at low-prestige colleges, saturating the labor market with college-educated workers who end up working at lower-skilled jobs.

It should follow, then, that for a given field of study, graduates of modest institutions should be dissatisfied with their decision to attend college at significantly higher rates than graduates of a given major who attended more selective and prestigious colleges.

My analysis of the data suggests a far more nuanced picture. Consider, for instance, graduates who studied visual and performing arts in college. Compared to graduates of private, not-for-profit institutions, visual arts graduates from public colleges and universities were significantly more satisfied that their pursuit of higher education was worthwhile than graduates of private universities. In fact: 73.6 percent of public college graduates in this field were satisfied about benefits versus costs. At private institutions, the figure was just 69.9 percent.

 In the biological and biomedical sciences, 88.2 percent of graduates from public colleges and universities reported that their bachelor’s degree was worth the cost, compared to 85 percent of private college graduates of biology who thought so.

The same pattern -- greater satisfaction among graduates of public institutions compared to private ones that pursuit of the degree was worth the cost -- held for graduates in business, management and marketing; communications and journalism; English language and literature; health professions and related programs; mathematics and statistics; parks and recreation studies; physical sciences; psychology; and public administration/social service.

Analyzing the Employment Factors

One’s employment experiences immediately after graduating from college should also influence one’s belief that pursuing a college degree was worth the cost and effort. On this score, the anti-expansionists’ claim does not appear to be true. 

Consider graduates of public colleges and universities. Among graduates who believed their undergraduate degree was worth the cost and effort, fully 88.2 percent of them believed that their degrees had helped them advanced their careers. At private institutions, 83.9 percent believed so.

Does admissions selectivity make a difference in whether college graduates were satisfied with the “importance and challenge” of their jobs soon after graduation? Yes, indeed:

85.2 percent of graduates of very selective institutions who were satisfied with the “importance and challenge” of their jobs reported that pursuing their degree was worth the cost and effort. Among graduates of moderately selective colleges the figure was 82.2 percent and at minimally selective institutions, 75.4 percent. Thus, graduating from a prestigious college or university seems to matter a lot in terms of job satisfaction soon after graduation. Still, remember that three of four graduates of even minimally selective colleges believed that pursuing their bachelor’s degree was important for their job satisfaction.

The Weight of Personal Factors

Personal, family and demographic characteristics of college graduates provides a further test of the anti-expansionists’ argument.

For instance, because students from families with low-incomes and low parental education are more likely to attend less prestigious colleges, the critics’ argument implies that graduates from disadvantaged families ought to be significantly less satisfied that their pursuit of a college degree was worth the cost compared to their more advantaged peers.

If the critics’ claim is true, then we should detect significantly less satisfaction among graduates whose parents are poorly educated.

The evidence on this score is mixed. On average, for all 2009 graduates, 88.6 percent were satisfied with the quality of their education. Consider how parent education affects this number:

Graduates expressing the highest rate of satisfaction (92.8 percent) were those whose parents had at least one professional degree. For graduates whose parents completed Bachelor’s degrees, the figure was 90.1 percent, and among graduates whose parents had relatively low amounts of higher education, including those whose parents had less than a two-year degree or some vocational training, 84 percent of these graduates were satisfied with educational quality.

 But look at this statistic: graduates whose parents did not complete high school were nearly as satisfied with quality of their education (88.9 percent) as graduates whose parents were far better educated.

Now consider parental income. The critics’ theory suggests that recent college graduates from more affluent families should be significantly more satisfied that the pursuit of their BA degree was worth the cost and effort than graduates from more modest family backgrounds.

After all, graduating with modest amounts of cultural and economic capital that is passed from one generation to the next, graduates from modest backgrounds should be relatively worse off in the labor market immediately after graduation, and therefore more likely to believe that pursing a college degree was not worth the effort.

The evidence only partially supports the critics’ argument. About 80 percent of 2009 graduates whose parents were in the top income quartile in 2006 believed earning their degree was worthwhile.

Somewhat less satisfied about costs versus benefits were graduates whose parents were in the bottom income quartile. Still, almost 78  percent of these graduates from low-income families were satisfied with their decision to earn a bachelor’s degree in terms of costs and benefits.

What’s more, graduates from the bottom quartile of family income were slightly more satisfied as peers whose parents’ income ranked in the third highest quartile.

One obvious counterargument to my analysis is that the results do not reflect the costs of education.  Critics would argue that graduates from more selective universities and wealthier families often pay more for their degrees, and therefore any diminished satisfaction they may have about the costs versus benefits of their degrees is driven by cost, not on whether they are more successful in the labor force than less wealthy students attending minimally selective colleges.

I tested this counterclaim by comparing satisfaction rates for graduates at highly selective institutions versus satisfaction of graduates at minimally selective institutions for a given net price. (In this case I used net price data reflecting tuition and fees in 2009 less all grants and VA benefits.)

Consider graduates who paid mid-level net prices, ranging from $6,000 to $12,000 per year at both types of institutions. At that net price, 77.6 percent of graduates of highly selective colleges and universities reported that pursuing their bachelor’s degree was worth the cost and effort. By contrast, 79.1 percent of graduates of minimally selective institutions were satisfied about the costs versus benefits of obtaining their degree.

This means that even considering what students actually pay for their degrees (at this mid-point net price), graduates of the sort of modest colleges and universities, who are most likely to contribute to the “over-educated” labor market, are even more satisfied than graduates of highly regarded universities that pursuing their degree was worthwhile.

On what principal of free markets and an open society, then, are these people to be told that they aren’t college material?                                           

As a nation, the critics suggest, we are investing too much in higher education.

If the anti-expansionists’ claims are true, then the correct policy solution might well be that state legislatures and public colleges and university systems should significantly raise admissions standards and reduce enrollments. On the theory that states are allocating too many resources to higher education (even as states’ are generally retrenching from public higher education) this reallocation of public priorities would reduce state spending on colleges and universities, presumably allowing then to spend more resources on other types of vocational training.

I have shown that, from the perspective of the actual consumers of higher education, exercising their freedom of choice in the marketplace, there is very little evidence to support the anti-expansionists’ claim.

If the United States is producing too many college graduates, then we should be able to observe high levels of dissatisfaction among recent college graduates – specifically, that their pursuit of a college education was not worth the cost and effort.

But that is not what the data show.

Even graduates of public institutions with minimal or modest admissions standards are in many cases more satisfied or equally satisfiedas graduates of more prestigious colleges that pursuing a bachelor’s degree was a good investment for them.

Relying on Bureau of Labor Statistics data, the critics also suggest that for many high school graduates, one’s pursuit of higher education is plainly a bad investment because they are filling jobs for which no college degree is even required.

I have shown not only that forecasted rates of employment growth hold plentiful opportunities for college graduates, but that the annual wages of graduates earning bachelor’s, master’s, doctoral, and professional degrees are of a different order of magnitude than jobs requiring on-the-job vocational training.

Finally, the anti-expansionists’ argue that the U.S. labor market is suffering from an enormous mismatch in terms of how much education workers have attained versus the minimum educational qualifications that jobs require. 

This claim also has very little support in the evidence.  For all levels of college and university training, the match of educational attainment versus requisite credentials is large, far surpassing the percentage of college-educated workers who are overqualified for jobs.

In the end, the elitist nature of the anti-expansionists’ claims should be disturbing to those who believe that all Americans, regardless of race or social class, should have an equal opportunity to pursue a basic higher education.

One might wonder if those who advocate more restricted educational opportunity, available only to young people deemed to be “college material,” would in fact have profoundly different views regarding their own children.

Let them tell the young woman who graduates from an East Los Angeles high school and finds a spot in the California State University system that her college degree was a waste of resources. Tell her that, when she has found her first real job doing what her degree trained her to do. Tell her this, after she discovers for the first time in her life, that she too is part of the American Dream.

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Peter Sacks is a writer and economist. He is the author of "Generation X Goes to College" and "Tearing Down the Gates: Confronting the Class Divide in American Education".



Comments (3)

cb:

I believe you are confusing the argument that all people should have a chance to attend college with the idea that more people should attend. And, no, arguing that we should not push more people into college, is not the same as arguing that only the rich should attend. Replacing need-based financial aid with merit-based aid may decrease the numbers of college students, but it would also give equal opportunity to all based on achievement while raising educational standards.

It would also be a good idea to avoid labeling those you disagree with as "elitists." Ad hominem attacks simply muddy the issues.

JE:

Sacks' argument also seems to recommend (or at least be comfortable with) the idea that all should pursue degrees (and even higher degrees) even if that policy results in the creation of a huge surplus of college-educated people who can't get jobs in their areas of study, or even any job at all that requires a degree. That might be OK (for the country if not the individuals) if it were not for the huge cost to those individuals or to the taxpayer. The other downside is anger among the redundant, which has turned out to be a big issue in several developing nations.

George Leef:

Although Sacks doesn't name me, he does name my partner in a 2010 PBS debate on higher education, Rich Vedder, so I'll assume that I'm also among his targets. There's too much to respond to here for a comment, but I must say something about the charge of "elitism."

It's groundless and a cheap shot.

My contention that many young people benefit little, either educationally or financially from going to college, has nothing whatsoever to do with their family background. There are many disengaged kids from well-to-do families who are wasting time and money (their family's and/or taxpayers') on the "college experience." Conversely, there are many others from non-affluent backgrounds who actually want to learn and want to do the work that expands their minds. Those students certainly belong in college. Furthermore, I have consistently advocated that the country break free of the stranglehold the education establishment has on K-12, which accounts for much of the pathetic level of skills that we find among so many minority students.

If Sacks can find anything elitist in that, he should explain exactly what it is.

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