Joe writes about how college is often seen as a way out of poverty and unemployment for underprivileged people, but why that actually isn’t true.
For people with disadvantaged backgrounds, college is often considered a sure means of economic advancement. Some might even consider it a ticket to the middle class. In an article last week, discussing ways to mitigate the wealth disparity among races, The Post quotedCecil Walters, Ohio University’s director of the Office for Multicultural Student Access and Retention, saying that “for minority students, an education could mean the difference between keeping the generational status quo and breaking the cycle.” There is strong reason to believe this is not true.
Make no mistake; these contentions have firm foundations. For decades, researchers have found consistent evidence that people who earn a college degree, tend to earn significantly more than those who do not and this should not surprise us. To this extent, a college degree holds tremendous value for some.
What should surprise us is the growing evidence that outcomes of college graduates are converging toward outcomes of people who did not graduate from college.
Over the past several decades, policymakers have expanded access to higher education, motivated by the traditional evidence that a college degree moves you up the economic ladder. This has led us to the widespread federal involvement in student financial aid with which we are all familiar. Policymakers fail to recognize, unfortunately, that these traditional findings are averages rather than guarantees.
New lines of research in economics suggest we are learning a hard lesson from this. With data from the National Center for Education Statistics and Postsecondary Education Opportunity — some of the best sources for the most recent publicly available data on the matter — we can observe the trends in college enrollment rates in general and compare that to poor students’ share of all bachelor’s degrees earned. This gives us an important look at the supply of labor.
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(Figure 1: Line graph)
As the college enrollment rate — the percent of 18-24 year olds who enter college — increases, poor students’ share of Bachelor’s degrees earned remains stagnant and struggles to break 10 percent. This is essentially a reminder that college access has been expanded in general, not just for poor students, and poor students are not necessarily having an easier time earning a degree as a result.
If we turn our attention to the labor demand side, we find similar hindrances. The Bureau of Labor Statistics, publishes data on employment outcomes and the typical level of education required for specific occupations. According to their data, in 2012, only about 39 percent of Bachelor’s degree holders were in jobs that actually require a Bachelor’s degree. More than 57 percent were in jobs that did not require a Bachelor’s degree at all. This sounds more like keeping the generational status quo, or even diminishing the status quo, rather than breaking the cycle.
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(Figure 2: Pie chart)
This underemployment — holding a job for which you are overqualified — of college graduates is a growing concern, especially as enrollments increase. As more and more people attend college and earn degrees, the demand for labor remains relatively unchanged. This forces some people out of the labor force and exacerbates unemployment for the poor. In the end, people who do not attend college lose out on low-income jobs for which they are perfectly qualified. Meanwhile, more graduates are taking jobs that do not require a degree in the first place.
We are left with an interesting paradox on higher education. The traditional view of economic mobility does not seem so true anymore. Now that college access has been greatly expanded, we find large numbers of janitors and waiters (95,284 and 307,086, respectively, to be precise) who have Bachelor’s degrees, effectively eliminating any economic value that a college degree had a generation or two ago. If we can overcome our higher education poverty cure, we might see access to economic advancement improve.
Joe Hartge is a senior studying economics at Ohio University and a research assistant at the Center for College Affordability and Productivity. Columns are written by a different CCAP student from Ohio University each week. Email Joe at jh755410@ohio.edu
