Value of Degrees Could Decline as Numbers Climb

There are more students than ever attending some form of postsecondary education institution to earn a credential that enhances their opportunities to compete for jobs. In fact, the education level for individuals aged 25-34 from 1940 to 2009 has increased from 6 percent to 32 percent.[1],[2] Now the federal government is leading the charge to drive that completion rate up to 60 percent across the United States.

If this trend continues, one must question the value of a postsecondary degree if such a high percentage of people hold one.

There is an overabundance of statistics to illustrate the private and societal returns on postsecondary education. A number of reports point out the positive returns on education, showcasing the correlation of education and financial and social returns to the individual and other returns to society at large.[3] Other benefits from postsecondary education include: increased tax revenues at all government levels, higher salaries and benefits, reduced crime rates and improved quality of life. Additionally, the link between high-quality education and economic growth has been made by numerous researchers.[4]

The relationship between the American economy and its system of postsecondary education has been symbiotic over the years. During times of economic growth, enrollment in higher education tends to decline because the supply of jobs outweighs the demand for jobs and thus decreases the demand for education. When the economy is in recession, enrollment in higher education tends to increase because the labor market reduces hiring, thereby forcing individuals to attain more, credentials to remain competitive in the workforce.

Not all researchers believe more education contributes to economic growth. For example, Murphy asserts that the dogmatic belief that postsecondary growth has an impact on economic success is false. He points out three major problems:

1. It overemphasizes the economy’s need for college and university graduates.




2. It hyperbolizes the significance of postsecondary graduates in economic booms.




3. It exaggerates the capacity of college and university education to shape the labor market for  the needs of employers and growing industries.[5]

Alison Wolf also questions the connection between degree attainment and economic growth. She notes, “we cannot use rates of return to prove that more educational spending must be a good idea. On the contrary: it is no more self-evident that, since some education makes some of us rich, more would make more of us richer than it is that ‘two aspirin good’ means ‘five aspirin better.’”[6]

Getting a college degree and an elite job is very beneficial, but for everyone who does not get a four-year degree, the future is obscure. There is an increasing divide between highly-educated and under-educated labor. The average salary of elite jobs rose to $58,600 between 1979 and 1995, salaries for good jobs dropped seven percent to $35,800, and salaries for less-skilled jobs dropped 16 percent to $24,000.[7]

Historically, the labor market rewards postsecondary degrees, but there is little empirical evidence that postsecondary degrees are indicators of higher skill levels. Continuing-education providers have a great opportunity to weigh in on this debate, given the evidence that specific certificate and credential programs provide relevant industry skills, but there is insufficient evidence to say that the emerging knowledge economy requires higher levels of education.

If students are pushed to simply earn degrees regardless of the content, the value of a postsecondary degree in the years ahead will probably decline. However, if students are encouraged to pursue a degree that leads to a positive workforce outcome, the value will remain unchanged or could even climb.

Policy makers and leaders in continuing education have the opportunity to open the door to discussions about what skills are needed for the future. It also opens the door to discuss measuring relevancy of what post-secondary graduates are able to do when they are awarded a post-secondary degree in any field. Additionally, it has been noted that future conversation must focus on improving the link between education and industry.

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References

[1] The College Board, Education Pays 2010, 2009, Figure 2.7

[2] U.S. Census Bureau, 2009b, Table A-1

[3] Sandy Baum and Kathleen Payea. “Education Pays 2004: The Benefits of Higher Education for Individuals and Society,” The College Board. Accessed at http://www.collegeboard.com/prod_downloads/press/cost04/EducationPays2004.pdf

[4] Anthony Carnevale and Donna M. Desrochers, “Help Wanted…Credentials required: Community Colleges in the Knowledge Economy,” Educational Testing Service.

[5] James Murphy, “A degree of waste: The economic benefits of educational expansion,” Oxford Review of Education Vol 19 Issue 1, 1993, p. 9-31.

[6] Alison Wolf, Does Education Matter? Myths About Education and Economic Growth. (London: Penguin Books, 2002)

[7] Anthony Carnevale and Stephen J. Rose, Education for What? The New Office Economy, (Princeton: Educational Testing Service, 1998).

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