The notion of the "college labor market" as a fixed set of occupations is remarkably static. In contrast, we assume that job and skill requirements are dynamic.

(This lively debate over future demand of college-educated workers will continue in our Forum.)

Northeastern University economists Paul E. Harrington and Andrew M. Sum argue that in our ...]]>

The notion of the "college labor market" as a fixed set of occupations is remarkably static. In contrast, we assume that job and skill requirements are dynamic.

(This lively debate over future demand of college-educated workers will continue in our Forum.)

Northeastern University economists Paul E. Harrington and Andrew M. Sum argue that in our recent report Help Wanted, we “radically overstate the size of the college labor market.”  This overcount, they claim, has nothing to do with the recession. “Even in times of near full employment,” Harrington and Sum argue that “substantial shares” of college-educated workers are “overeducated,” or “malemployed.” Harrington and Sum argue that we so overstate demand for college labor that we “ignore perhaps the most pressing problem facing college graduates today: malemployment, arguing the reality is that more and more college graduates are stuck in low-wage, low-skill jobs. This assertion contradicts the best available data on the hiring and pay practices of American employers. The evidence on earnings and college degrees is unequivocal: Employers continue to demand better-educated employees, and are willing to pay more to get them.

Harrington and Sum rely on official national and state Bureau of Labor Statistics (BLS) data, which implies that that New England is producing about 35% more college degrees than are actually required for current and future jobs. If true, their empirical assessment of “substantial shares” of “malemployed” people with college degrees in New England includes about 1.1 million people. [1] However, the earnings data raise serious questions about the quality of particular state and national government education data that undergirds their analysis.

If Harrington and Sum and the national and state BLS data are correct, "overeducation" and “malemployment” are rampant in every one of the New England states:

• Connecticut has 248,062 unnecessary degrees;
• Maine has 79,738 unnecessary degrees;
• Massachusetts has 531,669 unnecessary degrees [2];
• New Hampshire has 119,705 unnecessary degrees;
• Rhode Island has 70,904 unnecessary degrees; and
• Vermont has 51,026 unnecessary degrees.

Harrington and Sum have a point on “malemployment.” We agree there is some mismatch between college curricula and career opportunities. As they demonstrate, there are bartenders with bachelor’s degrees even in good times. However, they take the argument about over-qualification too far. The bartenders with bachelor’s degrees (and similar stories) are a testament to our failure to connect college programs to career pathways, but they do not signal overproduction of college degrees in general.

To the contrary, since the 1980s we have been underproducing college talent, and the college wage premium is the proof. Degree production in the 1980s flattened out after baby boomers reached college graduation age, and has remained flat ever since, at slightly above 40% of the labor force. Over the past decades, employers have responded to scarcity in college talent by raising college wages relative to the wages of workers with no more than high school diplomas. Yet in spite of the growing economic advantage of college degrees, the overproduction, over-qualification or “malemployed” school of thought still has a strong following. Harrington and Sum are not alone in their view that Americans get more college than is good for them. [3]

Overproduction?

The overproduction argument is always in the public dialogue, but gets more traction in hard times when even the most highly educated are unemployed or underemployed. The Great Recession of 2007, like recessions before it, has many people publicly wondering whether college is a safe investment. Hard times always inspire stories like bartenders with bachelor’s degrees, as well as the ever-popular cab drivers with PhD's and janitors with advanced degrees. With many college graduates unsuccessful in finding work, the temptation to reject postsecondary education as a viable economic option grows more tempting, especially among working families where college costs are always a stretch. Since we project a continuing slow recovery through 2016, the over-qualification and “malemployment” argument will likely get even more traction.

Media stories on the value of college follow the business cycle, and the bad advice gets more pointed as the recession deepens. The prominent conservative economist Richard Vedder thinks we need only a small fraction of the college talent we now produce. Charles Murray believes the vast majority of Americans are not innately intelligent enough for real college curricula. A few months ago, The New York Times suggested “Plan B: Skip College,” while the Washington Post ran “Parents Crunch the Numbers and Wonder, Is College Still Worth It?” Even the Chronicle of Higher Education has succumbed, recently running “Here’s Your Diploma. Now Here’s Your Mop,” a story about a college graduate working as a janitor that implies a college degree may not be worthwhile in today’s economic climate.

The New York Times and other prominent newspapers were printing the same kind of stories in the early 1980s during the last severe recession. The Times ran headlines like “The Underemployed: Working for Survival Instead of Careers.” The Washington Post even ran the college graduate-to-janitor story back in 1981: “When Lyman Crump graduated with a liberal arts degree he was confident his future rested in an office somewhere. But after working a year as a file clerk, Crump, 31, took a higher-paying job as a janitor.”

These ideas of “overeducation” were popular among labor economists in the 1970s and 1980s. It was in the context of stagflation in the 1970s and early 1980s that the big think books and articles were written about over-qualification and “malemployment.”  In that era, Harvard economist Richard Freeman wrote the Overeducated American and University of Pennsylvania sociologist Ivar Berg wrote Education and Jobs: The Great Training Robbery. It was also in the 1970s  that Frederick Harbison, the seminal author mentioned in Harrington and Sum’s critique of our work, coined the term “malemployment” as he worried over the ability of the economy to employ the full talents of the baby boom in other than low-wage, low-skill jobs. The BLS chimed in as well. As late as 1984, as the “bidding war” for college talent was underway, the New York Times quoted BLS Associate Commissioner Ronald Kutscher as saying “We are going to be turning out about 200,000 to 300,000 too many college graduates a year in the 80's. ... the supply far exceeds the demand.”

A boom in college jobs and earnings

Their central premise proved embarrassing when the boom in college jobs and earnings came in the 1980s—a boom that has continued with no sign of stopping, although it has slowed in recessions and picked up again in recoveries. After the early 1980s, the surplus of baby boomer college grads quickly became a shortage and spawned the most rapid and highest college wage premium in history.

The source of error in the dire predictions in the 1970s and early 1980s was too strong a focus on demography and not enough focus on the "upskilling" that would come with the knowledge economy that was replacing the industrial economy. At 74%, the college wage premium still dominates our labor markets and is the major cause of growing income inequality. Moreover, most of the growth in college degree requirements and earnings came in occupations where college degrees weren’t deemed “necessary” in the official data—occupations like insurance agents and financial analysts.  Going forward, both the demography and economic change favor increased demand for college degrees. The baby boom that reduced the college wage premium in 1970s by surging into the workforce will be surging out of the labor force over the next two decades. This most highly educated generation includes more than 40 million workers, each with roughly 40 years of experience. The retirement of college-educated baby boomers will only increase the demand for degrees to make up for their lost educational attainment as well as their experience.

That’s why we use the actual earnings of college to determine the demand for postsecondary education in the labor market instead of relying on the BLS’s subjective and static designations of college and non-college occupations. We reason that if the wages of people with postsecondary education are high and/or rising relative to people without postsecondary education within an occupation, there is an advantage that postsecondary education confers.  People with postsecondary education in these occupations, therefore, are not overeducated, because they see a real return to their educational investment—while all degrees may not produce equal returns, in virtually all cases, that return is far greater than the cost of obtaining the degrees. [4]

The difference between Harrington and Sum and BLS and our method is that we believe that we should not define the "college labor market" as “essentially a set of occupations,” in keeping with the elite, traditional, white-collar and professional jobs. The notion of the "college labor market" as a fixed set of occupations is remarkably static. In contrast, we assume that job and skill requirements are dynamic. Technology and other economic forces are constantly updating the skill requirements in jobs.  We view a college job as any job that brings substantial, positive earnings returns to a college degree, irrespective of occupation—whether an individual is an insurance agent or a rocket scientist. In contrast, Harrington and Sum argue that the economy and employment is like a game of musical chairs where opportunity is limited by a very small and fixed set of college jobs, many fewer than the economy’s college graduations.

Most importantly, what Harrington and Sum miss by defining occupations as either college occupations or non-college occupations is the shift toward increased postsecondary requirements that occurs even within occupations that are not deemed college jobs at a given point in time.  Their conclusions don’t coincide with the consensus among labor economists—that there has been a consistent shift towards increased postsecondary requirements on the job across a growing share of occupations that previously did not require two year or four year college degrees. [5] The increasing demand for college degrees among managers, healthcare workers, and office workers are examples in the white-collar world.  The increasing degree requirements among computer and information systems workers, production workers who become degreed technicians, the growth in healthcare technicians, and increased degrees among workers in utilities and transportation are examples in the blue-collar and pink-collar worlds.

The standard explanation for those shifts within the economics literature is a concept called “skill-biased technology change.”  The core mechanism behind this is that information technology automates repetitive tasks, increasing the relative value of non-repetitive tasks in individual occupations.   The relentless engine of technological change, spurred onward by global competition, drives up skill requirements and demand for postsecondary education and training within occupations—all occupations, not just “professional, technical, managerial and high-level sales occupations.” There is no indication that the economic trend has suddenly reversed itself, and the demographic effects of baby boom retirement are clear.

Moreover, our method is careful to minimize counting statistical outliers like those ever-present bartenders, cab drivers and janitors with BA’s and graduate degrees. As we point out in our Help Wanted study, these kinds of mismatches between degrees and low-skilled jobs are relatively small in number and don’t matter much in an economy of almost 150 million jobs. In addition, we have to account for the fact that most bartenders with bachelor’s degrees will eventually move on to better-paying jobs. Many workers are just passing through low-wage, low-skill jobs as part of their natural career progression and are not indicative of career-long effects of college degrees. Over a 10-year period, each cashier job has 13 incumbents who permanently leave the occupation; among medical doctors, that replacement rate is only one. People rarely leave jobs that require college because they have the best earnings, benefits and working conditions. There are many more brain surgeons who used to be cashiers than there are cashiers who used to be brain surgeons.

In addition, these kinds of non-college jobs are greatly over-represented in the official data because so many of them are part-time.  Although low-wage, low-skill jobs make up 20% of all jobs in a single year, they only make up 14% of the hours worked in a single year. Jobs that require a BA or better make up 30% of  all jobs, but 75% of them are full-time, full-year jobs, compared with 64% of jobs that require a high school diploma or less.

The BLS method: flaws and misinterpretation

Bartenders with bachelor’s degrees aside, in the final analysis, Harrington and Sum rest their empirical case on an appeal to a higher authority above reproach: the U.S. Bureau of Labor Statistics. Harrington and Sum write:

“Could BLS, the most objective, impartial and certainly data rich observer of American labor markets so objectively underestimate the demand for college graduates for such a relatively short time horizon? Our answer to this is no!”

We beg to differ.

We have high regard for BLS, and believe that the national and state level BLS occupational and employment data are unimpeachable. However, the BLS educational data is an offhand by-product of its employment and occupational data and is of substantially lower quality.

To a large extent, the poor quality of data that connects education to labor markets is a natural function of institutional silos. Labor departments at the federal and state level produce good employment, earnings and occupational data but are weak on its link with education. Education departments are strong on educational data but not its linkages with occupational and labor market data. Since no agency has responsibility for linking education and employment data, the connection is done badly and does not square with the broader economic literature that has shown skyrocketing returns to college degrees since the 1980s. That is why we set out in Help Wanted to link degrees and jobs both historically and over the near future.  Our report includes our results.

Because of the silos that separate official data on jobs form the official data on college degree production, the quality of data that links education to careers gets very little scrutiny  Every state and the vast majority of social scientists use the BLS education data uncritically. Similarly, Harrington and Sum accept the BLS data as gospel. In this regard, they are not alone. BLS’s deserved reputation on employment data gives its undeserved credibility to its static and misleading metrics on education requirements in labor markets. Very few ever look closely enough to see the huge discrepancies between the BLS and Census data on educational demand, or read the fine print, indicating that the Bureau does not claim to project educational demand. [6]

The Census data allow us to assess the BLS method. The Census Bureau actually counts college workers and their earnings in jobs. As time passes and the census data catch up with the BLS projections, we can determine if the BLS projections were accurate. To get to the punch line: The BLS projections always underpredict college demand.The BLS estimate the numbers of college degrees required and the census data report the actual numbers of college degrees employers hired; their conclusions are dramatically different. When we compare the BLS projections for 2006 and the actual count of people in the labor force with degrees in 2006, we see that the BLS undercounted the true count of postsecondary-educated workers by 17 million  in 2006, or roughly 30%, and by 22 million, or 40% in 2008. Our alternative method missed by 4%.

The bottom line is that the BLS predictions didn’t even come close to what actually happened in the economy. The only way to reconcile the BLS projections with what actually happened is to assert, as BLS, Harrington and Sum argue, that BLS is predicting the number of college degrees that employers require, not the actual numbers of college educated workers that employers hire. If this is the case then not only did employers hire these "extra" workers, in 2006 and 2008, but paid them more than 70% wage premiums for postsecondary degrees they didn’t need.   This would be cause for concern—it would mean that in 2008, 22 million workers—or more than a third of all workers with postsecondary education—got an appreciable economic benefit from their degrees that they didn’t earn. It would mean that employers were smart enough to cut back the college wage premium in the 1970s when they experienced an oversupply, courtesy of the baby boom, but the same employers started throwing money at degrees in the 1980s and continue to do so. If Harrington and Sum are correct, crisis abounds, markets don’t work, employers are irrational, and preparing your children for college is naive for all but a very select few.

We hope the dialogue over the measurement of the future demand for postsecondary-educated workers does not end here, but is carried into state agencies.  We need to know why the national and state BLS data show so much difference between what they estimate as the number of required college degrees and the actual counts of college degrees in each state. Intuitively, the difference between what the BLS says is required and the actual number of degrees is overqualification or “malemployment.” If that’s what the BLS believes, it needs to expand on why overqualified workers with college degrees make so much more than workers with high school or less. Eventually, the steady progress in most states to align education and careers will ultimately make the current flaws in our information systems moot, but in the meantime the myth of overeducation is perpetuated in national and state labor market data.

Unfortunately, the myth of overeducation misinforms policymakers looking for places to cut their budgets, and, worst of all, discourages decisions about college-going that are made at kitchen tables all across America. The sensationalist stories, the high unemployment among college graduates, and the misleading official data are unlikely to keep middle- and upper-class youth from going to college.  The real tragedy of these headlines is the message they send to less privileged youth for whom college is not an assumed path. The negative press on college fuels preexisting biases among working families that college is neither accessible nor worth the cost and effort. Moreover, the bad press and worse data strengthen the hand of elitists who argue that college should be the exclusive preserve of those born into the right race, ethnicity and bank account.

[1] Nationwide, a comparison of the BLS and Census data shows 37% or 22 million college degrees that are not required, even though employers pay much higher wages for these unnecessary degrees than they do for high school degrees.  See author’s calculations, CPS, various years.

[2] This count includes associate degrees and higher.

[3] Anyone who knows them or their work knows that Harrington and Sum are not to be associated with another popular view on overqualification that begins with the assertion that the majority of Americans are not smart enough for college. This elitist view on what’s best for other people’s children is most closely associated with Charles Murray and Richard Vedder and many more who believe we are lowering the bar by increasing access to college. To their credit, Harrington and Sum worry that college isn’t good for many students, not that the students aren’t good enough for many colleges. Our argument with Harrington and Sum is one of fact not values.

[4] Our projection method intentionally minimizes the impact of outliers—like bartenders with college degrees. For more information, please see the technical report on our website and Appendix 4 in our report.

[5] There is a deep and long literature on this subject.  It is best and most recently summarized in Claudia Goldin’s and Larry Katz’s book The Race Between Education and Technology (Harvard University Press, 2008).  The empirical essence of Goldin’s and Katz’s and Katz’s narrative is that the rising wage premium for college proves that technology is increasing the demand for college workers faster than we can produce them since the 1980s.

[6] The BLS does not claim to analyze educational demand nor do they project these estimates. The BLS data don’t project skill change at all. Instead they “assign” the most significant education and training requirements for employment in 755 particular occupations. BLS does not track skill or earnings from skill in occupations empirically.  Their educational assignment method is based on the subjective judgment of analysts in consultation with experts and 755 occupations, and requires a lot of subjective judgment and consultation. To some extent, BLS‘s limited efforts are a function of their limited goals. The fine print in the BLS data states at great length that their purpose is to represent the most significant education and training requirement in particular occupations. BLS recognizes assigning a single education level to a job does not accurately reflect what is needed on the job.  As they will tell you if asked, virtually every occupation in the economy comes with a variety of legitimate educational attainment levels.  According to BLS:

Because of the variability of job functions within a given occupation, and because different employers have many different requirements of education and training, workers in the same occupation can have substantially different education and training backgrounds. [BLS, 2009]

The New England states, like the rest of the nation, are finally starting to show signs of a recovery from the Great Recession of 2008, albeit at different paces. Three of the states, however, still have unemployment rates that are about four percentage points above where they were before the recession began in 2007 ...]]>

The New England states, like the rest of the nation, are finally starting to show signs of a recovery from the Great Recession of 2008, albeit at different paces. Three of the states, however, still have unemployment rates that are about four percentage points above where they were before the recession began in 2007 (Rhode Island, Massachusetts and Connecticut). The smaller increases in unemployment rates in the remaining states (Maine, New Hampshire and Vermont) can be partially explained by an increasing fraction of people joinin g the ranks of the discouraged worker, or a changing demographic composition favoring older workers.

Arising from this recovery, America will find itself on a collision course with the future: not enough Americans are completing college. In its most recent report, Help Wanted: Projections of Jobs and Education Requirements Through 2018, the Georgetown University Center on Education and the Workforce has shown that by 2018, we will need 22 million new college degrees to meet employers’ demand—but at current graduation rates, we will fall short of that number by at least 3 million postsecondary degrees, associate or better.

This 3 million shortfall is the equivalent of 300,000 additional graduates each year between now and 2018, or a 10% a n nual increase in degrees conferred by colleges and universities nationwide. College degrees are not the only kind of credential the American economy will come up short on; we will also need at least 4.7 million new workers with postsecondary certificates. At a time when every job is precious, this shortfall will mean lost economic and social opportunity for millions of American workers.

We cannot afford to linger on memories of an economy that promised well-paying jobs for anyone who graduated from high school. Over the past three decades, higher education has become a virtual must for American workers. Between 1973 and 2008, the share of jobs in the U.S. economy that required postsecondary education increased from 28% to 59%. According to our projections, the future promises more of the same. The share of postsecondary jobs will increase from 59% to 63% nationally over the next decade. High school graduates and dropouts will find themselves largely left behind in the coming decade as employer demand for workers with postsecondary degrees continues to surge.

In addition to the increasing education requirements of occupations, postsecondary education has become the threshold requirement for a middle-class family income.  In 1970, almost 60% of high school graduates were in the middle class. By 2007, the share had fallen to 45%. Over that same period, people with college degrees (bachelor’s and graduate degrees) have either stayed in the middle class or boarded the escalator upward to the highest three family income deciles.

The increased earning power conferred by postsecondary education and training is both tangible and lucrative over a worker’s lifetime. The range in lifetime earnings by educational attainment is greatest between high school dropouts and professional degrees—a range of $1,198,000 to $4,650,000, or a difference of $3,452,000.

Postsecondary education is your umbrella to weather the storm of economic adversity. During this recession, high school dropouts were three times as likely to be unemployed as holders of bachelor’s degrees or better. Yet, a higher level of education alone is not the answer to greater opportunity. Occupational choice and to a lesser extent, industrial choice also determines wages and economic prospect. For instance, 43% of workers with licenses and certificates in fields such as drafting or electronics earn more than their colleagues with an associate degree. About 27% of workers with licenses and certificates earn more than employees with a bachelor’s degree, and 31% of those with associate degrees earn more than their counterparts with a bachelor’s degree according to the National Education Longitudinal Study, 2000 .

These are the tangible benefits to postsecondary education. There are unmeasurable benefits as well. For example, education an educated citizenry can continue to defend and promote democratic ideals. Ultimately, however, the economic role of postsecondary education is central, especially in preparing American youth for work and helping adults stay abreast of economic change.

Our Help Wanted report demonstrates that employers will increasingly demand proof of competency of workers, not only in terms of formal degrees, but also through industry-based certification programs and credentials that require periodic renewals. We must create the appropriate infrastructure to generate:

1. Highly structured “learn and earn programs” like apprenticeships and on-the-job training;
2. Compressed training programs that integrate basic skills preparation with fast and intensive occupational training leading to postsecondary certificates with demonstrated labor market value;
3. Effective job and skill counseling for unemployed and underemployed experienced workers and working students to provide accurate information on earnings potential and career pathways;
4. Systems for maximizing the labor market value of postsecondary education and training programs by tying postsecondary transcript data with employer wage records data currently housed in the U.S. Employment Services; and
5. Statewide and nationwide development of online job search systems that match job openings and career pathways to available courses offered by nearby postsecondary institutions and as online courseware.

The New England states should make a firm commitment to improve access, reduce cost, improve efficiencies and better align students with viable job opportunities. Such a commitment is even more relevant as the U.S. Government considers requiring short-term credentialing programs to pass an earnings potential litmus test in order to be eligible for federal student aid programs.

New England: A Look at the Numbers

Table 1: Percentage of jobs that will require postsecondary education by 2018

The educational demand for jobs in New England in the next decade is as diverse as the states themselves.  Relative to the national average of 63% of jobs requiring postsecondary education and training, three states, Massachusetts, Connecticut and New Hampshire (68%, 65% and 64% respectively) are above average; Rhode Island and Vermont are just below the national trend. Due to a variety of economic factors explained in greater detail below, Maine demonstrates below average proportions of jobs (59%) requiring postsecondary education and training in the future. It is 32^nd in the nation.

These outcomes are influenced by many factors including the industrial make-up of the state, educational characteristics of the workforce and, increasingly, by the occupations that make up the different industries.   Career ladders are increasingly tied to occupations, that is, what you do, rather than where you do it. People no longer work their way up from the loading dock to the CEO’s office; instead they get educated and trained to perform a specific role, and progress upwards in an occupational hierarchy. Some occupations are tied to particular industries, such as healthcare occupations, but in many other cases, people cross between industries throughout their career. Someone trained in a sales occupation can make a living selling travel deals, computer equipment, and then stocks and bonds. Though these are all different industries, the jobs the individual holds will continue to require higher and higher levels of formal education tied to his or her occupation.

Occupations, Industries, and Education

Of all the occupations, Healthcare Professional and Technical, Education, STEM, Community Services and Arts and Managerial and Professional Office have the highest concentrations of jobs requiring some college education, a postsecondary vocational certificate or degree.

Among industries, our forecasts show that Information Services, Private Education Services, Government and Public Education Services, Financial Services and Professional and Business Services industries, have the highest concentrations of jobs requiring some college education, a postsecondary vocational certificate or degree. Furthermore the education-intensive industries of Information Services, Wholesale and Retail Trade Services, and Healthcare Services are the three fastest-growing industry sectors, while the traditional, less education-intensive base industries of Manufacturing and Natural Resources rank seventh and 13^th.  This means that states that use that particular occupational and industrial mix most intensely, by definition, will require the highest concentrations of postsecondary training of its workforce.

Overall, both occupations and industries with the fastest-growing output have the highest education requirements.  Thus, economic growth in the coming decade will be driven by the ongoing shift to a “college economy.”

Maine Will Fail to Attract High Paying Jobs in Growing Sectors

In 2018, 59% of all jobs in will require postsecondary education and training beyond high school.  The current job mix for Maine shows below average concentrations of workers in Private Education, Professional and Business Services, Information and Private Education Industries and above average concentrations in Manufacturing and Natural Resources. These characteristics contribute to a subdued demand for postsecondary education in Maine, compared with other New England states. There is an extraordinarily high demand for workers with high school diplomas, ranking Maine third in the nation in the proportion of its jobs for high school graduates.

Table 2: Snapshot of Educational demand for Total Jobs (2008 and 2018)

In 2018, there will be more jobs in Maine whose highest level of education is high school than jobs for holders of bachelor’s degrees and graduate degrees combined. The high school dropouts will still be concentrated in traditional industries like natural resources and manufacturing and occupations such as installation, maintenance and repair jobs, production occupations and farming fishing and forestry. Jobs requiring postsecondary education will span the entire occupational spectrum, but are generally organized in Education, Sales and Office and Administrative Support, Healthcare Practitioners and Managerial fields.

Maine will create 196,000 job vacancies from new jobs and from job openings due to retirement, 115,000 of which will be for those with postsecondary credentials.

Today, Maine is on par with the rest of the nation in the proportion of its residents with a college degree. But the state will fall behind in this measure if current trends in college completions and net migrations continue, according to research by the National Center for Higher Education Management Systems (NCHEMS).

New Hampshire Poised for a Boom in Post-recession Postsecondary Jobs But Will its Workers Be Prepared?

By 2018, 64% of jobs in New Hampshire will require postsecondary education and training beyond high school.  The current job mix for New Hampshire shows above average concentrations of workers in Professional and Business Services, and Healthcare Industries. These characteristics contribute to an elevated demand for postsecondary education in New Hampshire, compared to her New England sister states. There is particularly high demand for workers with bachelor’s degrees, ranking New Hampshire seventh in the nation in the proportion of its jobs for high school graduates. New Hampshire will show the biggest growth of all the New England states in net new jobs, 11%, by 2018. The largest growth in net new jobs created will require bachelor’s degrees (11%) or graduate degrees (13%).

Table 3: Snapshot of Educational demand for Total Jobs (2008 and 2018)

Job opportunities for those with postsecondary education and training will be twice as large as those for high school graduates in 2018. Bachelor’s degree jobs will increase by close to 20,000 over the 10-year timeframe. The jobs for holders of bachelor’s degrees will be concentrated in white-collar fields such as Computer and Mathematical Sciences, Education and Managerial jobs.  Substantial numbers of jobs also exist for holders of associate degrees in Sales and Office and Administrative Support fields.

New Hampshire will create 223,000 job vacancies, including new jobs and replacement jobs due to retirement, 141,000 of which will be for those with postsecondary credentials.

Vermont to Create Thousand of Postsecondary Jobs Despite Slow Growth

By 2018, 62% of Vermont jobs will require postsecondary education and training beyond high school.  The current job mix for Vermont shows above average concentrations of workers in Private Education and Healthcare Services. These characteristics contribute to a great demand for postsecondary education in Vermont, compared with other New England states. There is a relatively high demand for workers with bachelor’s degrees, ranking Vermont ninth in the nation in the proportion of its jobs for holders of bachelor’s degrees. Graduate degree jobs will grow by 8%, higher than any other education category over the 10-year timeframe. Despite these achievements, however, net new jobs will only grow by 3%– the second lowest rate of all New England States.

Table 4: Snapshot of Educational Demand for Total Jobs (2008 and 2018)

The distribution of jobs for those with postsecondary education and training will be very diverse in 2018.  Jobs at the top end for holders of bachelor’s degrees or better will outstrip jobs in the middle for holders of “Some College" or associate degrees by 18,000. Education and Healthcare will be the most substantial employers of college-educated citizens of Vermont.  Sales jobs, Food preparation and Serving and Office and Administrative support will dominate the demand for holders of high school diplomas.

Vermont will create 100,000 job vacancies from new jobs and job openings due to retirement, 62,000 of which will be for those with postsecondary credentials.

Today, Vermont ranks substantially above the rest of the nation in the proportion of its residents with a college degree and will remain ahead in this measure if current trends continue, according to NCHEMS research.

Massachusetts to Produce Half of All Postsecondary Job Vacancies in New England

By 2018, 68% of all jobs in Massachusetts will require postsecondary education and training beyond high school.  The current job mix for Massachusetts shows above average concentrations of Healthcare Services and Professional and Business Services. These characteristics result in an elevated demand for postsecondary education in Massachusetts compared with her New England sister states. Not only is the demand for postsecondary education in training highest in Massachusetts of the New England states, that demand is concentrated in bachelor’s degrees or better. Massachusetts ranks first in the nation in the proportion of its jobs for bachelor’s degrees and second in the proportion of its jobs for graduate degree holders. Bachelor’s degree and graduate degree jobs will have the largest growth in net new jobs created at 7% and 9% respectively.

Table 5: Snapshot of Educational Demand for Total Jobs (2008 and 2018)

There will be over 2.5 times as many jobs for holders of some postsecondary education and training than jobs for high school graduates by 2018. Graduate jobs will be concentrated in Education and Healthcare Professional jobs while bachelor’s degree jobs will be concentrated in Office and Administrative Support and Managerial professions.

Massachusetts will create 1 million job vacancies from growth and retirement, 707,000 of which will be for those with postsecondary credentials.

Today, Massachusetts is the best performing state in the nation in the proportion of its residents with a college degree and will remain on top if current trends in college completions and net migrations continue, according to NCHEMS research.

Percentage of Jobs for High School Dropouts Highest in Rhode Island

By 2018, 61% of all Rhode Island jobs will require postsecondary education and training beyond high school.  The current job mix for Rhode Island shows relatively high concentrations of workers in Healthcare and Leisure and Hospitality, and below average concentrations in Professional and Business Services and Finance. These characteristics result in a slightly lower demand for postsecondary education in Rhode Island, compared to the rest of New England. There is a very high demand for workers with graduate degrees, leading to Rhode Island ranking ninth in the nation in the proportion of its jobs for holders of graduate degrees.

Table 6: Snapshot of Educational demand for Total Jobs (2008 and 2018)

Eleven percent of jobs in 2018 will require a high school diploma—the highest proportion of high school jobs in the New England states. Job opportunities for those with middle education levels—associate degrees and "Some College" will be just as large as job opportunities for high school graduates.  These “middle-skill” jobs will be concentrated in Office and Administrative Support, Sales and Blue-collar jobs by 2018. Bachelor’s degree holders will be concentrated in Education and Managerial occupations.

Rhode Island will create 153,000 job vacancies due to both retirement and job growth, 93,000 of which will be for those with postsecondary credentials.

Today, Rhode Island ranks ahead of the nation in the proportion of its residents with a college degree, and NCHEMS research suggests the state will perform substantially above average in this measure if current trends continue.

Connecticut to Produce a Quarter of All Postsecondary Job Vacancies in New England

By 2018, 65% of all Connecticut jobs will require postsecondary education and training beyond high school.  Connecticut’s economy features above average concentrations of workers in Healthcare, Professional and Business Services, and Financial Services. These characteristics result in an elevated demand for postsecondary education in Connecticut, compared to the rest of the region. There is an extraordinarily high demand for workers with bachelor’s degrees or better, ranking Connecticut 8^th in the nation in the proportion of its jobs for bachelor’s degrees holders and fourth nationally in the proportion of jobs for those with graduate degrees.

Table 7: Snapshot of Educational demand for Total Jobs (2008 and 2018)

Jobs for holders of a bachelor’s degree of better will exceed the number of opportunities for workers with middle skills (Some College or Associate’s degrees) or holders of a high school diploma only. Graduate degrees and bachelor’s degrees will be concentrated in Education and Healthcare fields.

Connecticut will create 564,000 job vacancies from new jobs and job openings due to retirement, 359,000 of which will be for those with postsecondary credentials.

Today, Connecticut is above the rest of the nation in the proportion of its residents with a college degree. NCHEMS research however, has estimated that this state will fall behind if current trends in college completions and net migrations continue.

Bridging the Gap: Developing a Career Development Information System

The Help Wanted report highlights the need in the U.S. economy for more workers with postsecondary education and training in order to leverage economic opportunity. The next stage of this analysis should discuss the data we need to better align curricula to training and to jobs. In the above diagram, the units of analysis at the pinnacle are the decision-makers—both from an institutional perspective of placing scarce resources to their most efficient use—and from an individual’s perspective of making long-term career decisions and selecting the education and training required to achieve their goals.

The U.S. is unable to help people match their educational preparation with their career ambitions—but not because it cannot be done. All the information required to align postsecondary educational choices with careers is available, but unused. The forecast in this report demonstrates that projecting education and job requirements is technically feasible with a minimum amount of error. We need to build analytical capacity to empirically answer the questions that parents, young adults and educators alike have been asking all along. The mechanism required should connect the college supply engine (transcript data) to workforce development (unemployment wage records) to opportunities in real time (current job openings).

The data apparatus in the figure above closes the loop of institutional decision-making and individual career choices and outlines a system that could fully address the following challenges:

1. Are some credentials worth more than others, and if so by how much?  Connecting wage records to transcript data will allow us to give a more nuanced answer than the standard hierarchical relationship between formal education levels and compensation differentials.
2. What are the successful education and career pathways? To what extent have the steppingstones of certificates achieved their goals of providing upward mobility for lower-income Americans? An analysis of longitudinal survey data that traces individual attainment, occupational choice and wage outcomes is the only way to test the long run successes of individuals as they navigate their lives.
3. Are students able to define the distance in bite-sized attainable clusters of courses between their current level of attainment and the attainment required to gain access to their desired profession? A “learning exchange” could connect the students to current job openings and a sample of colleges and universities that offer the courses he or she needs to attain that job.
4. How closely aligned are curricula to the knowledge, skills, abilities, work activities and interests of occupations? How effective are institutions of higher learning at preparing their students for the tasks and work activities that they will encounter in the workplace? For example, the O*NET database created by the National O*Net Consortium and funded by the U.S. Department of Labor specifies the full set of occupational competencies required for success in particular occupations and related clusters of similar careers. Currently, its primary use is as a counseling tool for career planning, delivered online through a user-friendly interface. Its potential remains largely untapped.
5. The human capital landscape has evolved beyond traditional formal diplomas and degrees to include industry-based certifications and state required licenses. How valuable are industrial-based certifications, how prevalent are they in the society and to what is their marginal value to formal education levels?

The current economic climate further heightens the need to create data system that increase the efficient allocation of scare resources, reduces employment search time due to mismatch and asymmetric information and provides decision makers with the resources they need to better align career decisions with long term economic interests.  To do otherwise risks leaving hundreds of thousands of workers behind, as the economy recovers and builds for the future.

And that would be a dismal recovery, indeed.

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Anthony P. Carnevale is director of the Georgetown University Center on Education and the Workforce. Nicole Smith is senior economist at the Georgetown University Center on Education and the Workforce.