American college attendance has had a good, long run. Per the National Center for Education
Statistics, in 1869 and 1870 only 1.3% of those aged 18 to 24 were enrolled in post-high-school
educational institutions. That did not
reach 5% until 1921-1922 and 10% until 1945-1946. The G.I. Bill, which provided funding for
World War II soldiers to attend universities, along with higher prosperity in
general, caused steady increases from then through the fall of 1957, when the
share reached 22%. It continued climbing
almost every year, and broke 40% in the fall of 1975 and 50% 14 years
later. In 1995, the tracked data switched
to those at degree-granting institutions, and attendance continued to rise,
from 34.3% that year through 42.0% in 2011.
Since then it has been edging down, to 41.0% in 2012 and slightly lower,
though not certainly as the data is still incomplete, since then.
Which way will it go from here? For several reasons, it is probable that the percentage
of young adults in college will continue to drop. The main two are the intertwined combination of
ever-higher student loan debt, which has shot up from $366 billion ten years
ago to at least $1.2 trillion today, and poorer job prospects for graduates; in
2012, 28% of bachelor’s-degree holders were not working, double the rate of
2000, and other studies have shown that only one third of them had positions
related to their majors. Yet at the same
time, overall lifetime earnings are frequently claimed to be much higher for
those with four-year degrees than those without.
Into this growing controversy came Peter Cappelli, a Wharton
business professor and author of 2012’s Why
Good People Can’t Get Jobs. In that
book, he showed that what some have called the “skills gap” between employers
and possible employees is actually a matter of the former refusing to either pay
true market rates or to provide training, both of which were more likely in the
past. His effort from earlier this year,
Will College Pay Off?, addressed what
is happening between universities and the job market. Although he does not seemingly believe in a
permanent jobs crisis, neither does he see any labor shortage now, and makes
some fine iconoclastic points. Which are
the best?
First, higher
education is different now. “It is less likely to be a four-year
experience on a campus and more likely to be something spread out over many
years, often across different colleges, and frequently delivered in office
parks.” About two-thirds of students now
work. It is also more expensive than
ever, with an increasing share of that cost managed through loans, and costs
more than anything else many families will ever buy, even their houses, with
American students paying “about four times more than their peers in countries
elsewhere.”
Second, colleges have
taken over vocational training. In
the past, most people working at skilled trades and lesser manual positions
learned what they needed either on the job or in high school industrial arts
classes. Such instruction now mainly
comes from community colleges. That is
also the case for many skills needed for office jobs, for which as recently as
the 1990s training usually came from employers.
Overall, according to one 2011 study, only 21% of workers had received
any on-the-job training, at all, for the previous five years.
Third, despite great efforts and an enormous outpouring of new
majors which, as Cappelli pointed out, sound like job titles, colleges are still not connecting well with
employers. These new lines of study
– examples of majors (not courses) in the book range from “international
hospitality management” and “invasive cardiovascular technology” to “casino
construction management” and “pharmaceutical marketing” – are financially risky,
since decisions to enroll in them are typically made five or six years in
advance and thus with little knowledge of ultimate employer demand. They also tend to overemphasize first jobs,
which, with employers increasingly promoting from outside, may not lead to a true
career. Few universities have
information on their graduates’ career success, and what they have is often
marred by nonrespondent bias in surveys and lack of incorporating positions
students already had before their studies started. The gap between apparent educational
qualifications and actually getting a job has historically been large, and is
little smaller now.
Fourth, there is no surplus
of STEM (science, technology, engineering, and mathematics) opportunities. As of 2013, only 22% of majors in those
fields got jobs in them. Engineering and
information technology in particular have long had notoriously cyclical demand,
and often students starting college when such positions were readily available
find an oversupply of candidates when they finish. After noting also that career progression in
technical fields has become less likely, Cappelli concluded that “there just is
no evidence at all of a greater need for science and math grads.”
Fifth, people may need
to get degrees for jobs which don’t officially require them. At a presentation I gave this month I
advocated becoming a paralegal, since they were taking over more and more work
from lawyers. A woman in the audience
said she, with that job, had been losing opportunities to unemployed lawyers! I said that would not happen with medical
doctors, since their supply was kept low, but could be the case in other fields
where those with the highest set of credentials were often jobless. I personally saw that phenomenon at a lower
level in college town Bloomington, Indiana in its early-1980s near-depression,
when those hiring could require bachelor’s degrees even for clerks and cashiers,
since plenty of unemployed people had them.
Cappelli called that “bumping,” and noted that it was especially
prevalent during the Great Recession.
Sixth, the idea that
college helps lifetime earnings has no fewer than four serious logical flaws. The first is the maturity difference between people
at age 18 and those 22 or older. The
second error is that universities do well at identifying applicants who have or
are on course to have skills and attributes that help them in their work
lives. Relatively intelligent people who
usually finish what they start tend to make more money, with or without college
time. Third, such statistics reflect
people who had half or more of their careers in the past, and the worst of the
problem of recent graduates is more recent.
The fourth problem, which Cappelli did not mention, is that many people
at the top of the socioeconomic pyramid can obtain first-rate opportunities for
children who get the proper education, a connection in which universities are
more a conduit to success than a reason for it.
Seventh, when the above is taken into account, the financial outcome of attending college
for many is negative. There is no
getting around that, and, as a result, enrollment is likely to drop from
here.