Worldwide college rates pass us by

Study finds huge benefits of higher ed
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There’s a lot to celebrate in not being the worst. The United States’ education system has taken a beating on the international stage over the past decade, but, according to the latest report on the state of education in the world, we’re not terrible. We are, however, stagnating while other industrialized countries move ahead. To paraphrase Woody Allen, the relationship between education and global competitiveness is like a shark: “it has to constantly move forward or it dies. And I think what we got on our hands is a dead shark.”

That’s harsh, but consider this figure from Education at a Glance 2011, published this morning by the Organisation for Economic Co-operation

Countries's share of higher ed degrees by age group (from OECD report) click to enlarge
Countries’s share of higher ed degrees by age group (from OECD report) click to enlarge

and Development (OECD). Of the 39 million 55- to 64-year-olds around the world with college degrees, more than a third are in the United States. Those are the highly educated baby boomers. But the number of people attending college has been increasing rapidly worldwide and now there are about 81 million college graduates between 25 and 34 years old. Of that group, just over 20% are Americans. At the same time, China’s proportion has tripled.

“The one thing that you see today if you just look across age groups, the United States is quite alone in that young people entering the labor market are not better educated than the people leaving the labor market,” said Andreas Schleicher, head of OECD’s Indicators and Analysis Division. “There’s nothing that points to a decline – the United States is actually growing its college completion rate – it’s just that the growth rate is not as high as other countries’.”

California‘s labor gap

While the United States is falling behind other countries, California is lagging behind other states in much the same way. Among baby boomers, 35% have a bachelor’s degree or better. That dips to 27% of 25- to 29-year-olds, according to the Public Policy Institute of California.

The PPIC report, “Closing the Gap: Meeting California’s Need for College Graduates,” estimates the state will have one million fewer college graduates than it needs when the boomers retire. To fill all the skilled jobs, we’ll need 60,000 more baccalaureate degrees per year by 2025.

Getting to this sluggish point is sort of a classic Tortoise and the Hare fable. “Other countries have taken the U.S. model of investing in schools more seriously than we have,” said Hoover Institution Senior Fellow Eric Hanushek, adding that that doesn’t bode well for our economic health.

“What we’re finding is we’re becoming less and less competitive in terms of human capital and schooling and it’s going to come back to haunt us,” said Hanushek.

Hold on, the decent news is coming

The drop in degrees is not just about being too complacent. There are other trends in the United States that harm our global position.  College is very expensive; average tuition is higher than any other country.  “The United States really is in a class by itself in the price of higher education,” Schleicher says, although he acknowledges there’s no hard data to prove that this is causing the decrease in college graduation rates. [*See correction below].

And here’s a humorous point, according to OECD statistics, the reason for the higher fees and smaller public support is that we pay low to average taxes

Costs of higher education around the world (from OECD report) click to enlarge

Costs of higher education around the world (from OECD report) click to enlarge

(emphasis added) compared to most developed nations, so the cost of college falls hard on families and students run up tens of thousands of dollars in loans that cut into their future earnings.

It’s not a lost cause for the United States, however, not even close.  The 500-page OECD report is a treasure trove (overused term, but true in this case) of amazing statistics and many of them place the U.S. in good standing.

  • 99% of our K-12 teachers meet state qualifications.
  • Even though classroom instruction time has taken a hit, we still exceed the OECD average at 1,068 hours for high school.
  • Ditto for class size; it’s increasing but remains lower that most other nations.
  • Despite the high price tag for a college degree, graduates more than make up for it in future earnings and lower unemployment rates.
    • The unemployment rate for high school drop outs is 15.8%, but for college graduates it drops to 4.9%.
    • College graduates earn about 87% more over their lifetime than high school graduates who don’t go on to college.
Employment by level of education (from OECD report) click to enlarge

Employment by level of education (from OECD report) click to enlarge

College education bought the same benefits in nearly every developed nation.  What’s more, says Schleicher, is that the earnings premium stays put no matter how many more people attend college.

“The one message that is very important messages that emerges from this publication is that the increase in the number of higher educated workers has not led to a decrease in their pay.”

But don’t let that go to your head.

“I think that the competition of the future in the world is based upon what people know and the quality of their human capital,” said the Hoover Institution’s Hanushek, “and we’re sinking relative to all the other developed countries.”

*  The number of Americans earning college degrees has been steadily rising, from 11% of the population in 1970 to 30% in 2010. Younger Americans, however, are not keeping pace with their peers in other developed countries, so among 34 countries in the OECD report, we have fallen to 15th place in the percentage of 25 to 34 year olds with college degrees.

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15 Comments

  1. I am always troubled by reference to PPIC’s “Closing the Gap” report, given it is based on very poor statistical manipulation and unfounded, economic assumptions.  Below is an excerpt from that report that illustrates the weakness of their “trend projections,” and which undermines the credibility of one of their underlying assumptions that lead to their 1 million college graduates deficit conclusion. 

    It is a weak premise to assume that the current number of college graduates in today’s workforce proves the demand for those college degrees.  Does PPIC even consider how many of those graduates are even working in a field at all related to their degrees or whether their jobs actually require a B.A./B.S. (what Dr. Ken Gray, Penn State emeritus professor, refers to “underemployment” statistics)?  They just assume today’s proportion of college degrees in the workforce is an exact economic match to the demand for such degrees, and then extrapolate those proportions into the future (and, actually, use the most recent spike in college rates as their baseline for growth predictions in future years).

    While I am very supportive of college degrees for those pursuing careers requiring this level of higher education and training, policymakers, taxpayers and loan-burdened students need to ask themselves the tough questions that evidently a lot of think tanks and special interests have no desire to consider.  Not all college degrees are equal, and not every good paying job that helps sustain our economy requires such expensive, higher education.  The growing college loan bubble will soon burst wide open, and all Californians (and Americans) will be holding the bag, just as we have with the mortgage/housing bust.

    Here is an excerpt of the PPIC report:
    “Our economic projections represent continuations of long-standing trends in California. For example, from 1990 to 2006, the share of workerswith a college degree increased from 25 to 34 percent; our projections indicate that this trend will continue at about the same pace, so that by 2025, 41 percent of workers will need to hold a college degree if the workforce is to meet the demands of the California economy.”

    ’nuff said … hopefully.  But if not, here’s a headline and introductory excerpt from today’s Washington Post to drive the point home that college is not an end unto itself:

    “Study: College Graduates Driving Increase In Bankruptcy Filings
    College graduates are the fastest-growing group of consumers who have filed for bankruptcy protection in the past five years, according to a new study by a financial nonprofit, which underscores the broad reach of the Great Recession.”

    We need to move education reform discussions beyond platitudes.  With our stagnant economy and the troubles facing our European counterparts, time is not on our side.  It’s time to get real about competing in the global economy and what it will take to adequately prepare the next generation of American workers and entreprenuers to succeed in this worldwide marketplace.  “College for all” is vapid and unrealistic, not to mention potentially counterproductive and costly for not only for society, at large, but for far too many tuition-burdened and irrelevant degree-holding students, as well.

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  2. I went to an elite college and graduated $10,000 in debt. Great investment for me, my family, and for the fine government programs that helped sponsor me.
     
    When I was a student, to go to UC for 4 years would probably cost about $40k for all expenses, and you could reasonably expect a job in the $30-$35k range when you graduated.
    Today that education costs $120k… and you can hope if you’re lucky to get a job that pays $35-$40k when you graduate.
     
    The economics are not looking so good these days. Mechanics and plumbers can apprentice for pay, and their jobs can’t be outsourced.
     
    I share @Fred’s comments about the ridiculousness of some of the statements in the report. My favorite is that the growth rate- while still growing – is not as fast as those of nations where few kids historically attended college. Well, yes. Welcome to the tyranny of percentages.

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  3. There’s an erroneous statement here that should be corrected — the U.S. isn’t experiencing a decrease in college graduation rates:
     
    ”The United States really is in a class by itself in the price of higher education,” Schleicher says, although he acknowledges there’s no hard data to prove that this is causing the decrease in college graduation rates.
     
    Schleicher also is quoted as saying:  “…the United States is actually growing its college completion rate – it’s just that the growth rate is not as high as other countries’.”
     
    I think this is something we need to be clear, precise and careful about. Well, the press should be clear, precise and careful about everything, actually…
     
    Also, it seems self-evident that a country where a college education is likely the family’s financial burden of a lifetime (except probably housing) will be more challenged in sending students to college than a country where a college education is free. Would it really require hard data to make a convincing case about that?

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  4. Caroline,
    I held off responding to your comment to try to get more data to make sense of a complicated set of figures.
    First, you are right that the number of Baccalaureate degrees in the U.S. is rising, not falling.
    According to the National Center for Education Statistics, in 1970-71, people between the ages of 25 and 29 held 839,730 degrees. That amounted to 16.4 % of the total number of people in that age group.
    In 2008-09, people between 25 and 29 held 1,601,368 four year or higher degrees, representing 31.7% of the population in that age group.
    What I should have written, is that the U.S. share of college degrees worldwide has been steadily falling.  Out of 34 countries compared by OECD, we rank 15th in the share of young adults aged 25-34 who hold college degrees. When you add in all adult, we jump to the top five. What it means is that younger generations in other countries are increasing their rates college degrees more rapidly than the U.S.

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  5. Thanks, Kathy. I would guess that you went on autopilot for a minute when you wrote that there was “a decrease,” which was contradicted by the rest of your post. So all that was really needed was to correct that, or rather to reconcile the conflicting information within the post.
     
    Sorry to pontificate, but in my former life as a newspaper copy editor, including on a business weekly,  I learned that it’s common for rushed reporters to mislabel *a slowed rate of increase* as a decrease.
     
    This has more import on this topic because there is such a push from many forces to damn U.S. educational attainment. For example, we saw President Obama give a string of inaccurate supposed facts purporting to show how poor our schools are and how ill-educated our students are in speeches from the moment he took office. (Is it just me who takes offense when people keep trying to, in essence, portray my kids as stupid?)
     
    And I’ll take one more chance to emphasize again the confounding factor of the cost of college here vs. the cost — or rather lack thereof — of college in other nations. The retail value of my son’s college education will total about $230,000, for example. We receive adequate financial aid, but it took determination and savvy to navigate that process, and we had to be undeterred by all that to even apply to the college. Smart financial planning for parents always includes the “financing college” picture, which they are advised to focus on from their children’s birth, if not before. None of that is needed in European nations.
     
    In my opinion that disparity means it’s essentially impossible even to make comparisons.

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  6. But @Kathy – despite the gloom and doom in your headline – it would be helpful if you acknowledged that:
     
    “What I should have written, is that the U.S. share of college degrees worldwide has been steadily falling.  Out of 34 countries compared by OECD, we rank 15th in the share of young adults aged 25-34 who hold college degrees. When you add in all adult, we jump to the top five. What it means is that younger generations in other countries are increasing their rates college degrees more rapidly than the U.S.”

    Is not about a failure of the US. It’s about the rest of the world coming up to our standard of living. That may be worth note, and may be a reminder that we’re not some special golden nation that will stay on top forever, but it’s not a sign of our decline.
     
    The tyranny of percentages:
     
    The US has 100 people who go to college one year and 110 the next. Increase of 10%.
    Elbonia sent 4 kids to college one year and 5 the next. Increase of 25%.
    Oh noes! Elbonia is kicking our collective cans! :-) :-)
     
    Always be careful comparing percentages of disparate data set sizes.
    Why write a gloom and doom headline for something that isn’t?

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  7. That’s like graphs that aren’t zero-based, my household’s favorite method for newspapers to mislead readers, whether inadvertently or not. We’re aficionados.
     

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  8. el, yes, percentages can be misleading, but in this case the raw worldwide numbers – not of a single country, but of some three dozen industrialized nations – are quite large; 81 million.  This post wasn’t meant to denigrate the United States, rather economists say it’s a warning that we’re not keeping pace.  If we were to break it down further, that disparity is becoming most pronounced in engineering and the hard sciences, subjects that drive innovation and ultimately, economic growth.
    Just last night, I attended an event honoring Faysal Sohail, a venture capitalist who made his fortune starting companies that developed breakthrough technology in the semiconductor industry. Sohail is very involved in education in Silicon Valley and is chair of the Silicon Valley Education Foundation Board of Directors.  He spoke about the OECD data from the position of someone who funds many tech companies, and said the lack of graduates in engineering and science in the United States is a problem, especially as other countries vie to create their own Silicon Valleys.
     

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  9. @Kathy: with respect, the headline is all about the US falling behind. It feeds into a larger narrative. Your article then goes on to refute the headline. I don’t get that.
     
    And, on the lack of graduates in science and engineering, I think that what we have there more than anything is a job market with a great deal of friction rather than a true lack of talent. Engineering jobs have very long hiring cycles and there’s a real reluctance to take on anyone who isn’t perfect for the job. The problem is that technology changes so fast that expecting the perfect person pre-trained is a losing battle. Hire smart lifetime learners with the tech background, plan to train them a bit, and then those people aren’t so hard to find… especially if you’re willing to consider experienced engineers over 50… or, horrors, ones who are currently unemployed. And there’s the other problem that in some areas, there is a definite shortage of tech people. Despite the hype, for every story of a CEO who tells you he can’t find tech workers, there are quite a few stories of science and technology graduates who have gone to work at Starbucks because they needed the health benefits and couldn’t wait.
     
    I believe in strong science and technology training; I love this field. But in a market-based economy, there’s a real reason why a lot of our best-and-brightest kids who can choose any field they want find other fields more secure and financially rewarding. (And even among science and technology graduates, Wall Street absorbs rather more than you might expect.) Kids who go into science just for the money and job security are almost certain to be disappointed.

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    • el, Caroline: You can interpret data as you will, but Kathy’s post and correction do not contradict the headline. Other nations have taken the U.S. model of education and run with it. The U.S. college graduation rate for 25 to 34 year olds has increased over the past half-century, but 14 other nations’ college graduation rates, including those of Canada, Korea, Japan and Australia now surpass that of the United States. That does not preclude the need for more vigorous training for highly skilled technical jobs. (The college graduation rate in Germany, at around 27 percent, is lower than that of the United States, according to the OECD.)

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  10. Just to clarify, I knew it wasn’t meant to denigrate the U.S. It’s just that in a climate where so many voices ARE intending to denigrate the U.S. and its students (or maybe its entire citizenry), an error like that helps add impetus to the denigration frenzy. Case in point: Another episode of “Stupid in America” by reformer darling John Stossel is coming out.
     
     
     
     
     
     

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  11. I would also love to see those Silicon Valley CEOs advocate more for returning UC to an affordable possibility. Our local high school graduates a pretty high percentage of kids who take calculus as seniors (or earlier) – but none of those kids are getting to UC because it is unaffordable. Most of them are going to the junior college and then planning (I hope they are following through) to transfer to CSU. One or two get to CSU directly.
     
    These are kids who absolutely deserve and would benefit from the much more rigorous science exposure at UC, and the opportunities to work in science labs and have exposure to researchers. But they don’t have $30k x 5 years worth of funding for it, and the grants and money they are able to get even makes CSU a reach.

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  12. Not to beat a dead horse, but since things are getting confused:
     
    No, the post and correction don’t contradict each other. The original wording in the post that clearly stated that there is a “decrease in college graduation rates” contradicted other information within the original post:

    Schleicher also is quoted as saying:  “…the United States is actually growing its college completion rate – it’s just that the growth rate is not as high as other countries’.”
    That’s not an issue of  interpreting data. It was inaccurate to state that there was a decrease in college graduation rates.
     
    That has been cleared up — as I understand it, we all agree that that was an error and there is not a decrease in college graduation rates.
     
    My subsequent comments involve finer points around these issues.

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  13. Oh, and I never mentioned the headline. My issue was the inaccurate statement that there had been a decrease in the U.S. college graduation rate.
     
    As noted (I can’t say this too often), you can’t compare a situation in which college is the financial burden of a lifetime with a situation in which college is free or negligible cost. It’s not sound or sensible.

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  14. How come when I click “reply,” it doesn’t show up as a reply to the post I was replying to but just goes to the end?

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