Friday, December 2, 2011

Arts and Sciences, Supply and Demand

I came across a couple of interesting facts about our education system recently in an article in the Casey Daily Dispatch titled "Friends Don't Let Friends Major In The Liberal Arts" by Doug Hornig and Alex Daley.
  • 25% of students who begin high school in the United States do not finish.  Fewer students who start high school today graduate than they did 40 years ago.  79% finished in 1971 but only 75% are graduating today despite the fact that the world and the economy is far more complex and education and skills are far more important in securing a good paying job. 
  • In fact, the United States is the only developed country in the world where a higher percentage of  55 to 64 year olds has a high school degree than do 25 to 34 year olds.
  • This chart from tells the story.
Source: U.S. Department of Education, Digest of Education Statistics, 2009.

Hornig and Daley tell the story of what happens after high school.  What I found surprising is that the percentage of college graduates for American citizens aged 25-34 is no higher than the percentage for those aged 55-64 - 41% of both age groups have a degree.  30 years ago that was good enough to lead the world.  We now rank 16th!
Of those students who do make it through high school, 30% will not go on to any further education. That means 70% enroll immediately in a two- or four-year degree program, a major increase from the about 49% three decades ago. Despite rising college entry rates, we are not graduating any additional college students. That's largely because among those who immediately enroll in college post high school, some 40% are not expected to get their degrees within six years.
The result: our overall college-educated cohort has flatlined over the past 30 years. The number of American citizens aged 25-34 who have attained a college education – including either a two- or four-year degree program – is exactly the same as the percentage among 55-64-year-olds, at 41%. (The US is also the only developed nation where a higher percentage of 55- to 64-year-olds than 25- to 34-year-olds has graduated from high school.)
Thirty years ago that 41% figure led the world in college grads; now we're 16th and trending lower.
I have always believed that one of the major advantages our country had was our higher education system which is available and accessible to almost everyone.  This is much different than in many other countries where the university is only an option to the privileged or is closed to the few that can pass difficult and highly competititive national tests.  We still are the country of choice for higher education in the world.  For example, an incredible 33% of all doctoral candidates in our universities are foreign students.
While it has some problems for sure, the US remains a leader in post-secondary educational quality. One need look no further than the increasing number of foreign students pursuing advanced degrees in the US. For the 2009-10 school year, about 690,000 non-US citizens were enrolled at colleges in the US – the highest level in the world and up 26% from a decade ago.  
Not only are foreigners attending our schools in record numbers, they are far more apt to pursue high-level degrees than US students. Foreign students constitute 2.5% of bachelor's degree students, 10% of graduate students, and 33% of doctoral candidates.
When you look at what the foreign students are studying compared to our students it is also cause for concern.  Growing economies need people trained in science, technology, engineering and math- so-called STEM studies.  However, these are exactly the areas of studies that American students are avoiding in favor of a Liberal Arts education.  In fact, many colleges promote a liberal arts background arguing that it is more flexible for the 21st Century economy that will likely require increased job adaptability.

The result is only 1 in 6 American students is majoring in the STEM areas.  For foreign students, it is 1 in 3.
When fewer students attended college and even fewer jobs required technical skills, private employers, and especially government, could soak up the overflow, putting people to work provided they had a degree, any degree... for a while. English literature, sociology, psychology, communications, fine arts, gender studies, and the like were majors that led, inadvertently, to nontechnical jobs – the blue-collar work of an information economy, marketing, and business, and of course to teaching the increasing numbers of new college students.
However, more careers than ever now require technical skills. Economic growth has slowed and unemployment rates have spiked, making employers much pickier about qualifications to hire. Plus, boomers have chosen or been forced to work longer in those professorships and other jobs.
There is now a glut of liberal arts majors. A classic bubble, born of unrealistic expectations that the investment of a hundred grand (or more) must result in a cascade of job offers. Or at least one.
It's not happening. A study from Georgetown University listed the five college majors with the highest unemployment rates (crossed against popularity): clinical psychology, 19.5%; miscellaneous fine arts, 16.2%; United States history, 15.1%; library science, 15.0%; and military technologies and educational psychology are tied at 10.9%.
Unemployment rates for STEM subjects? Astrophysics/astronomy, just about 0%; geological and geophysics engineering, 0% as well; physical science, 2.5%; geosciences, 3.2%; and math/computer science, 3.5%. 

Georgetown University's Center on Education and the Workforce produced the study referenced above, "What's It Worth?: The Economic Value of College Majors" (this link is to the Selected Findings of that report), with a detailed analysis of earnings and employment outcomes for different undergraduate majors.  The study indicates that a college education does produce greater earnings potential compared to a high school education but different undergraduate majors lead to significantly different career wages.  For example, petroleum engineers with a bachelor's degree have median earnings of $120,000 per year and those with a counseling psychology degree earn only $29,000.

There are 179,000 students majoring in Philosophy, 125,000 in Anthropology or Archealogy and 80,000 in Art History according to the Georgetown report. By contrast, 154,000 are majoring in Chemical Engineering, 15,000 in Petroleum Engineering and 12,000 in Environmental Engineering.   How many philosophers or art historians do we need compared to chemical and petroleum engineers?  These disparities alone explain a lot about the income disparities upon graduation.  Supply and demand are concepts that even non-economics majors should understand.

Another major problem of higher education in the United States is the growing disparity between female and male college enrollment.  There are now 3 women in college for every 2 men.  In the early 1970's these percentages were reversed.   This chart was last updated in 2005 but it shows the change in the proportion of 18-24 men and women in college since 1967.

Source: US Census Bureau by the Population Reference Bureau

Since women have traditionally been less likely to select STEM studies this has also exacerbated the technical skills problem in higher education. For example, the Georgetown study indicates that females only comprise 16% of engineering students. More needs to be done to encourage girls in these fields from a young age where the cultural bias seems to be even more pronounced.

What does this all mean?  More education does not guarantee more income.  There are high school drop-outs that are millionaires.  However, you increase your odds of increased income with more education.  The 25% who do not finish high school face many challenges in earning an income in the 21st century.  However, those who go to college need to think carefully about their choice of majors.

College is an investment.  Students and their parents should be thinking about the return on that investment more than ever as college costs soar and more rely on student loans to pay for their education.

No comments:

Post a Comment