Sunday, August 19, 2012

Get thee to a university

On average, there has pretty much never been a better time to hold a college or advanced degree.  Here's some amazing graphs from the Georgetown Public Policy Institute.

The first deals with the recent recession and current "recovery" (clic the pics for more glorious images):


College and Advanced degree holders suffered no net job loss in the recession and have gained 2 million jobs in the recovery. Those with some college suffered moderate job loss in the recession and have just about returned to square one during the recovery. Those with High school diplomas or less lost almost 6 million jobs during the recession and have not regained any of those in the course of the recovery.

The next graph shows that the recession just exacerbated what is a longer run process:



Since 1989 we've seen negative job growth for those with HS or less, and since 1995 a de-coupling of job growth between the some college and college grad or more.

The report also claims that the wage premium for a college or advance degree has held steady in the face of these trends.

So a whether it's just signaling, or whether it's gaining human capital, higher education is more important than ever for economic success in modern America!

Oh and by the way, yes I know that I'm a university professor and stuff like this is very good for me and the future of my profession.






10 comments:

Tom said...

The correlation is easy to see. I would like to see a study* concerning causation. In the rose colored ivory tower, the "college teaches what employers need" meme will be popular. I have doubts on that. A good study would have to separate out the kind of person who would go to college if he could from more natural dropouts. There also might be a hiring bias, where potential employers use the college degree question as a cheap filter.


*A study done by a highly educated person, of course!

Anonymous said...

What of the meme/fact/claim/outcry that a huge percent of degree holders are in non-degree-requiring jobs? Perhaps this has just always been the case but it was an embarrassment to humanities departments?

kebko said...

I think a good chunk of the decrease is related to lower teenage employment resulting from minimum wage increases, which helps to explain why the decline begins before the recession. If obamacare creates relatively higher costs for low wage employment, I would expect there to be a continuing drag on that category.
For the longer term trends, wouldn't you need to account for population changes? I assume that the population with some college has grown much faster over the last few decades than the population with no college.
It seems to me like there are other causes that lead to this relationship. Shouldn't that be our expectation? Unemployment is caused by frictions. Without frictions, any causation should show up in wages, not employment.

Jim Oliver said...

If I am hiring and I have a choice of a candidate who was intelligent enough, conformist enough and diligent enough to have graduated from college and a one who has not, all else being equal, I will hire the college grad. So with rising unemployment I would expect college grads to take less desirable jobs but not to be unemployed.

kebko said...

I have to comment one more time. First, I noticed that there are actually 3 kinks in the "high school or less" line where the trend is sharply bent down without a corresponding change in the other lines - 1990, late 1996, and 2007. These are the 3 times when minimum wage increases were passed. Actually, there is a fourth spot that can be seen in the first graph, which is the sharp reversal in spring 2010. It certainly seems interesting that this very odd turnaround in the recovery happened there. Obviously the most significant event of that time was the passage of Obamacare.

And, I think Russ Roberts would have something to say about treating the sub-populations and job pool as stable over decades.

And, I think Bryan Caplan would have something to say about heady conclusions that ignore obvious signalling complications.

This study just seems poor. And, to conclude that the solution is to get the few people who don't already attempt to go to college to sign up for it. Something useful to do would be to go interview college and high-school drop-outs. There are millions of them. They aren't hard to find. They might have something to add to the discussion.

Dirty Davey said...

re: Kebko -- I suspect the spring 2010 bump is most likely related to census hiring. If you look at the percent job loss graph at:

http://www.calculatedriskblog.com/2012/08/employment-another-fairly-weak-report.html

you can see how the census affected the overall curve of employement.

kebko said...

Ah, good point about the Census.

Max said...

Aehm. What kind of jobs are we talking about. If the small portion of the college students all get a government job than all this tells is that stimulus has the function to keep degree holders in Jobs.! If this is a scale of private sector jobs then it is because employers still believe that college degrees show discipline and are easier to employ. At least in my opinion that is.

Anonymous said...

thanks

Alex said...

Hi there,
I read your post Get thee to a university, and can feel free to recommend other readers because it is meticulously written and rich with real data.
Thank you for such a good article :)
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