Educational attainment

In 1983, the National Commission on Excellence in Education issued a report that assessed the quality of education in the U.S. Authors of the report declared that the state of America's education made it "a nation at risk." The report went even further to assert that while the American people "can take justifiable pride in what our schools and colleges have historically accomplished and contributed to the United States and the well-being of its people, the educational foundations of our society are presently being eroded by a rising tide of mediocrity that threatens our very future as a Nation and a people." They concluded: "What was unimaginable a generation ago has begun to occur—others are matching and surpassing our educational attainments."25 From our current vantage point, it is impossible not to see this statement as prophetic.

The relationship between educational attainment and skills acquisition appears obvious and reasonable: As the primary vehicle by which we learn literacy and numeracy skills, formal education enhances skill levels. Those with greater levels of educational attainment naturally have higher skill levels. The PIAAC data provide us with an opportunity to probe beneath the story and examine whether and how the narrative shifts when considering comparable international data. By exploring both in absolute and relative terms the skills associated with different levels of educational attainment, these data shed light on both the quantity of education our young adults have received and some evidence about the quality of our secondary and post-secondary educational institutions.

Increasingly throughout much of the 20th century, education was viewed as a powerful equalizing force for social mobility, deeply connected to the idea that greater attainment of skills would beget economic prosperity. Goldin and Katz, in their seminal work on educational attainment and wage structures in the U.S., refer to the era as the "Human Capital Century," a period that helped define the U.S. as a global leader in terms of the investments made in the skills of its workforce. The establishment of mass public secondary schooling in the early decades of the century, and what they term a "flexible" higher education system, was closely tied to a long period of economic growth in the U.S. In their words:

That the twentieth century was both the American Century and the Human Capital Century is no historical accident. Economic growth in the more modern period requires educated workers, managers, entrepreneurs, and citizens. Modern technology must be invented, innovated, put in place, and maintained. They must have capable workers at the helm... Because the American people were the most educated in the world, they were in the best position to invest, be entrepreneurial, and produce goods and services using advanced technologies.26

Moreover, as Goldin and Katz attest, "a greater level of education in the entire nation tends to foster a higher rate of aggregate growth."27 Given this assumption, when technological progress is aligned with an increase in quality education, economic inequalities will be reduced. This scenario characterizes much of the growth of both GDP and per-capita income from 1940–1970, a time sandwiched between periods of relatively high income inequality.

Throughout much of the 20th century, in fact, the U.S. led industrialized nations in the educational attainment levels of its citizens. This is no longer the case. In 2010, the U.S. ranked third of 22 PIAAC participating countries in its percentage of 25- to 64-year-olds with a tertiary (or post-secondary) education28; Japan and Canada both exceeded the U.S. on this measure (see table C-3 for complete data). When we look exclusively at the younger population, that is, those between 25–34 in 2010 (and part of our "millennials"), the U.S. ranking drops to 10th. Millennials in Korea, Japan, Canada, Ireland, Norway, the UK, Australia, Flanders/Belgium, and France are more likely to have attained a tertiary degree than U.S. millennials. Figure 6 displays the dramatic difference in both the levels of educational attainment between younger and older adults across countries, as well as the comparative advantage that the younger generations in some countries appear to have in terms of their educational attainment levels vis-à-vis the United States.

The interplay between technological innovations on the one hand, and education and skills acquisition on the other, is part of a complex and multifaceted process. A number of studies by economists and policy advisors have highlighted the interaction of income and educational attainment as technology and globalization have converged to influence economic changes over the past 40 years. For example, in 1963, college graduates earned 1.5 times the hourly wage of high school graduates; by 2009, this ratio had risen to 1.95, with nearly half of the increase (45 percentage points) occurring after 1980. This increase does not even take into account critical nonwage benefits (e.g., sick and vacation pay, employer-paid health insurance, and retirement contributions), and thereby likely underestimates the real income differential between high school and college graduates in the U.S. Moreover, it should be noted that much of the increase is the result of a decrease in the real earnings for those with only a high school education.29

Underlying these now well-documented facts about America's economic rise in the post-World War II era is the supposition that human capital—skills, competencies, and attitudes—has become a critical aspect of a country's economic growth and an increasingly critical prerequisite to success in the labor market. Therefore, understanding how we gain skills, and what levels of skills we have—not just in K-12 education, but also in formal higher post-secondary institutions and informal education—is critical to grasping how our economy functions and how individuals within our society rise and fall with the shifting demands of the global marketplace. These are not just abstract concerns, though the large-scale shifts can often appear that way. They affect how much individuals can earn and what economic prospects and educational opportunities are available to them (as well as their children) over their lifetimes. In more subtle yet still critical ways, these forces also influence how connected individuals feel to their communities and society.30

Figure 6

It is clear that the cost of not going to college, or gaining skills in a post-secondary educational setting, is steeper than it has ever been. Yet key questions remain: What is the skill level and economic prospects for both our college educated young adults, and those with a secondary, or other non-baccalaureate, post-secondary degree? How susceptible are members of society with the lowest levels of education, or groups who are receiving subpar post-secondary education, to lasting periods of unemployment or underemployment? What is the risk that they will not be able to earn a livable wage to support themselves and their families? And finally, if a large percentage of our adults are receiving post-secondary education but still do not demonstrate that they possess adequate skills, what benefit does that education provide and at what cost?

Thirty years after the publication of A Nation at Risk, trend data from international surveys on adult skills and educational attainment in the U.S. raise questions about the quality of our educational systems.31 Although a greater percentage of young adults (between the ages of 20–34)32 are attaining higher levels of education since 2003, their average numeracy scores declined at the high school and above high school levels (figure 7).33 The percentages of these U.S. millennials below level 3 (the minimum standard for numeracy) increased at all educational levels, and the percentage of millennials at the highest level of proficiency (level 4/5) decreased for those with post-secondary degrees.

While one expects high percentages below level 3 for those with the least amount of education, these numbers are noteworthy: 97 percent of millennials without a high school education and 72 percent of millennials whose highest level of education was high school are below the minimum standard in numeracy. In other words, just 28 percent of those who indicated that their highest level of educational attainment was high school scored at level 3 or above. In addition, although the percentages of millennials who had at least some post-secondary education increased 12 percentage points, so did the percentage of those who did not meet minimum standards for proficiency (i.e., those below level 3), signaling that a growing proportion of our more highly educated millennials lack necessary foundational skills in numeracy.

PIAAC data on U.S. adult skill levels and educational attainment mesh well with overall economic and labor market trends that underscore the increasing importance of educational attainment in skills acquisition. U.S. millennials who only have a high school credential score 54 points (more than one standard deviation) below their peers in the U.S. who have a four-year bachelor's degree (figure 8 and table C-4).34 Those with some post-secondary education score 24 points below those with a four-year bachelor's degree. The picture within the U.S. certainly looks more hopeful for individuals who obtain higher levels of educational attainment.

Figure 7 Figure 7

Comparing the scores of U.S. millennials with those of their peers in other countries, however, reveals a different and troubling picture. The scores of U.S. millennials whose highest level of educational attainment was either less than a high school credential or a high school credential are lower than those of their counterparts in every other country measured by PIAAC except France, where the scores for those with less than a high school credential were not significantly different.

At least as disturbing is that U.S. millennials with a four-year bachelor's degree scored higher than their counterparts in only two countries: Poland and Spain. Our most educated—those with a master's or research degree—scored higher than their peers only in Ireland, Poland, and Spain. U.S. millennials who have successfully attained undergraduate and graduate degrees demonstrate skill levels below those of all but a few of the participating countries.

Figure 8

In terms of the percentage of the total population that has attained higher levels of education, the U.S. apparently still has an advantage; but much as the Nation at Risk report warned in 1983, other countries are exceeding us in terms of skill levels of their populations. For example, only 10 percent of U.S. young adults age 25–34 reported that they did not have a high school credential, compared to the OECD average of 13 percent. This percentage varied widely among OECD countries. In Italy and Spain, 28 percent and 34 percent of their young adults, respectively, reported that they had less than a high school education. In Canada, the Czech Republic, Finland, Flanders/Belgium, Japan, Poland, and the Republic of Korea, less than 10 percent indicated they had this lowest level of educational attainment.35 Even though our younger population is among the most educated, our average scale score ranking is similar to that of other countries with relatively large percentages of their population with less than a high school credential.

Indeed, while millennials are often portrayed in the media as being on track to be our best educated generation ever, their skill levels are comparatively weak.36 U.S. adults age 25–34 whose highest level of education is a post-secondary, non-baccalaureate degree had an average score of 269. This score is near the OECD average for this age group that reports its highest level of education is a high school credential (271). In 10 countries, adults age 25–34 reporting their highest level of education as a high school credential scored higher than their U.S. peers with a post-secondary, non-baccalaureate degree. U.S. young adults that attain what we consider a high level of post-secondary education—a four-year baccalaureate degree—scored the same as the young adults with only a high school education in three of the top-performing countries: Finland, Japan, and the Netherlands.

The 21st century appears to be one where the U.S. must play catch-up to the gains made by other countries, especially in terms of skills. Among other things, this should persuade us to consider critically the value that higher education in the U.S. is contributing to the skills of our young adults. Moreover, it should encourage us to shift our focus from a discussion of attainment alone to the skill level that our young adult population is acquiring. Because so many millennials are increasingly going in debt to pay for higher education, it behooves us to consider ways that we can make meaningful changes to the policies that govern access to, payment for, and the attainment of skills within these institutions.37

25 A Nation At Risk: The Imperative For Educational Reform. Report to the nation and the Secretary of Education prepared by the National Commission on Excellence in Education (Washington, DC, April 1983).

26 Goldin and Katz, "Race Between Education and Technology," 1-2.

27 Goldin & Katz, "Race Between Education and Technology"; 2. See also Michael Greenstone, Adam Looney, Jeremy Patashnik, and Muxin Yu, Thirteen Economic Facts About Social Mobility and the Role of Education (Washington, DC: The Hamilton Project, 2013); Frank Levy and Richard Murnane, Dancing with Robots, Human Skills for Computerized Work (Washington, DC: Third Way, 2013).

28 Tertiary education broadly refers to all post-secondary education, including but not limited to universities. Colleges, technical training institutes, community colleges, nursing schools, research laboratories and others constitute tertiary institutions.

29 Autor, Polarization of Job Opportunities; Goldin and Katz, "Race Between Education and Technology"; Paul Taylor, "The Rising Cost of Not Going to College," Pew Research Center, 2014; Greenstone et al., Thirteen Economic Facts about Social Mobility.

30 Henry Braun, "The Dynamics of Opportunity in America: A Working Framework" (Prepared for Educational Testing Service, Opportunity in America, forthcoming); Greenstone et al., Thirteen Economic Facts about Social Mobility; Wilkinson & Pickett, The Spirit Level.

31 Trend analyses for the numeracy scale have been computed between the PIAAC and ALL, administered in 2003–2008.

32 For this portion of the analysis, we have adjusted our age group from the millennials (ages 16–34) that we examine in other portions of the paper. Research (both national and international) defines age of completion of upper secondary school at 20–25, depending on the country. In order to both accurately reflect the skill level of millennials and adjust for limited sample sizes in the PIAAC and ALL data for specific age segments of the population, we focus on 20- to 34-year-olds for the U.S. trend data, ages 25–34 in comparing different levels of education across countries, and ages 20–34 in any crosstabulations that use educational attainment data. This allows us to adjust the data to account for the fact that 16- to 19-year-olds have generally not yet completed high school (or upper secondary school) because they are currently enrolled in some form of post-secondary education (e.g., artificially inflated the percentage – and often the score – for this educational attainment category). It also allows for an accurate reflection of the percentages and skills of millennials who have attained additional levels of post-secondary education. See OECD, Education at a Glance 2014 (Paris: OECD Indicators, OECD Publishing, 2014), http://www.oecd-ilibrary.org/education/education-at-a-glance-2014_eag-2014-en for a discussion of educational attainment and age.

33 This analysis compares the numeracy scores and proficiency levels of adults using the following three educational attainment levels:

  • Those who did not complete a secondary-level education (i.e., lacking a high school diploma)
  • Those who completed secondary-level education but no level of post-secondary training
  • Those who obtained post-secondary education (though not necessarily a degree)

34 For this analysis, we are able to look at the following five levels of educational attainment (noted with corresponding International Standard Classification of Education [ISCED] levels):

  • Those who did not complete a secondary-level education (i.e., lacking a high school credential) – ISCED 1, 2, 3C short or less
  • Those who completed secondary-level education but no level of post-secondary training – ISCED 3A-B/C long
  • Those with some post-secondary education, professional but not a bachelor"s degree – ISCED 4A, B, C/5B
  • Those who obtained a bachelor"s degree – ISCED 5A
  • Those who obtained a graduate or professional degree – ISCED 5A/6

35 Note that many countries (e.g., Norway, Finland, the Netherlands) have secondary education systems that graduate adults at a later age than other countries, which may likely contribute to the larger percentage in this category.

36 On educational levels of millennials, see: Kevin Carey, "Americans Think We Have the World"s Best Colleges. We Don"t," New York Times, June 28, 2014. http://www.nytimes.com/2014/06/29/upshot/americans-think-we-have-the-worlds-best-colleges-we-dont.html; Millennials: Confident. Connected. Open to Change, eds. Paul Taylor and Scott Keeter, (Washington, DC: Pew Research Center, February 2010), http://www.pewsocialtrends.org/files/2010/10/millennials-confident-connected-open-to-change.pdf; Janet Novack and Samantha Sharf, "The Recession Generation." Forbes, August 18, 2014; The Council of Economic Advisers, 15 Economic Facts About Millennials, October 2014, http://www.whitehouse.gov/sites/default/files/docs/millennials_report.pdf.

37 Suzanne Mettler, Degrees of Inequality: How the Politics of Higher Education Sabotaged the American Dream (New York: Basic Books, 2014).

COMPARING HIGHER AND LOWER PERFORMERS
PARENTAL EDUCATIONAL ATTAINMENT