Education!and!Wage!Outcomes!for!the!Arkansas!Workforce!
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- Clement Wilkerson
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1 ! 1355DaveWardDrive,Suite#102 Conway,AR72034 Education!and!Wage!Outcomes!for!the!Arkansas!Workforce! InArkansas,thereisastrongrelationshipbetweeneducationachievementandaveragewages. Surprisingly,thisrelationshipexistswhetherornotoneactuallyattainedadegreeorcertificatethatone wasworkingtoward.thosewithsomecollegehoursmademorethanthosewithoutanycollege education,andthosewithmorecollegehourshadhigheraveragewagesthanthosewithfewerhours. Whilethereisalsoabumpinwagesassociatedwithadegreeorcertificate,participationinhigher educationisassociatedwithhigherwages,evenwithoutthedegreeorcertificate.thesameholdtrue forthosewithahighschooleducationorless.thosewholefthighschoolasaseniormakemorethan thosewholeftasajunior. The!Data!Are!Clear!!More!Education!Means!Higher!Wages! TheArkansasworkforceisdiverse,inboththeeducationalbackgrounditsworkersbringtotheirjobs andtheemploymentoutcomes,wages,oftheseworkers.tounderstandthisdiversityonecanstudya sliceofthisworkforce,agroupofworkerswhoseeducationalattainment,atwhateverlevelthatmay havebeen,endedin2006.somegraduatedhighschoolthatyearandwentdirectlytotheworkforce. Somedidnotgraduatehighschoolandenteredtheworkforceanyway.Othersendedtheirparticipation inhighereducation,eitherthroughadegreeorcredentialthatyearortheysimplydecidedtheburdens ofhighereducationweretoomuchandstoppedgoingtocollege. Thefocusofthisresearchwastosee,givenadiversegroupofArkansanswhoseeducational achievementendedin2006,whataretheaveragewagesfiveyearslatergiventheireducational achievement?granted,theexceptionprovidestherule.therearesomewhohaveachievedgreat success,evenasahighschooldropoutandothersstruggleforgainfulemploymentdespitethefactthat theyhaveagraduatedegree.whatisofinterestiswhatcouldtheaverageindividualexpectintermsof employmentoutcomesgivenwhateverleveloftheirinvestmentineducation? labelsanyonewhohasattendedcollegebutdoesnothaveadegreeas SomeCollege, butthereisa significantdifferencebetweenworkerswhohave60hoursofcollegecreditwithoutadegree,versus thosewhohaveonly6hoursofcollegecreditwithoutadegree.inarkansas,thehighertheeducational achievementtheindividualhas,thehighertheaveragewages.anactualdegreeorcredentialalongthe wayincreaseswagesaswell,soanimmediatepolicyimplicationwouldbetoremoveasmanybarriersas possibleforthosewhodohavesomecollegehourstoreturntoschooltocompleteacredential.infact, ArkansasiscurrentlydoingthiswithagrantfromtheKresgefoundation,toidentifystudentswhoare currentlyenrolledincollegewhomightalreadyhaveenoughhoursforanassociate sdegree,inorder thatthedegreebeawardedtothemautomatically.
2 !!!!!! 2! Therehavebeenmajoreconomicchangesinthestatesincethisgroup slasteducationattainment.in 2006,theeconomywasrobust,fueledinpartbywhatwenowrecognizewasahousingbubble.The relativeboomsimplyseemedthenewnormal.inaddition,workwasjustbeginningonwhatwouldbe anothereconomicdriverinthestate,frackingofthefayettevilleshale.thereweremorejobsatthat timeavailableforsomeonewhohadahighschooldegreeorless.anydeficienciesinskillsaworker mighthavecouldquicklybemadeuponanactualjobsite. Forthisstudy,datawerecombinedfromtheArkansasDepartmentofEducation,ArkansasDepartment ofhighereducation,arkansasdepartmentofworkforceservices,andarkansasdepartmentofcareer Education.DatafromtheNationalStudentClearinghousewasalsousedtodetermineeducational attainmentforthosefromarkansaswhowenttoaninstitutionofhighereducationoutsidethestate. ThesedatawerejoinedtogetherinadeidentifiedmannerandtheresultsanalyzedattheArkansas ResearchCenter. Thecohortissplitintofivegroupsbasedontheireducationalattainmentin2006 HighSchoolorLess, SomeCollege,CollegeCredential(CertificateofProficiency,TechnicalCertificate,orAssociatesDegree), BachelorDegree,andGraduateDegree.Weidentified69,515membersofthiscohort.Theiraverageage in2006was26.4,50.7%arefemale,andtheaveragesalaryin2011fortheentirecohortwas23,903. Theyaresplitroughlyintothirds.36.9%areahighschoolgraduateorless,31.3%attendedcollegebut donothaveacertificateordegree,and31.8%haveacertificateordegree.inemploymentoutcomes, wages,youcanseethereisaclearandsignificantrelationshipbetweeneducationalattainmentandthe wagesthoseindividualsaremakingtoday.itisalsoimportanttonotethatofthoseinthearkansas workforcewithsomecollegeoracredential,thegroupswiththehighestaveragewages,themajority arewomen,55.5%. Table!1! 36.93%! 31.25%! 11.92%! 12.07%! 7.82%! 12,499! 23,024!!27,631!!!38,887!!!52,447!! HS!or!less! Some! College! CredenMal! less!than! Bach! Bachelors! Beyond! Bachelors! %ofcohort 2011Wages
3 Couldwehaveconvincedagraduatingseniorin2006thatiftheydidnotcontinuetheireducationtheir expectedannualsalarywouldbeonly12,499fiveyearslater?couldwehaveconvincedsomeone attendingcollegein2006butthinkingofdroppingoutthatyes,actuallygettingthatcredentialordegree representsasignificantincreaseintheirannualwageswhichwillaccrueovertheirlifetime?therehas beenalotofdiscussionaboutthecostsofhighereducationandthedebtstudentshaveaftercollege.in WilliamBennettcoauthoredabookprovocativelytitledIs#College#Worth#It?#However,theHamilton ProjectwiththeBrookingsInstitutioncalculatesthereturnontheinvestmentofabachelor sdegreeto be15.2%,evenfactoringinthelostwagesassociatedwithtimerequiredtoattainthatdegree.as collegebecomesmoreaccessibleforworkingstudentsthroughsuchthingsasonlineclasses,theimpact ofhighereducationonwageslosttoattendcollegewillfall. companyorsomeonewithagraduatedegreeworkingasawaiter.however,itisveryclearthatfor most,educationalattainmentwillestablishhowmuchmoneytheycanexpecttoearnovertheir lifetime.thislinearrelationshipbetweeneducationandwagesismadeevenclearerifwefurtherdivide ouroriginalgroupsintofinerdetailconcerningeducationalachievementandwageoutcomes. Wage!Value!of!a!High!School!Diploma,!Some!College,!and!Various!Credentials! Ifwelookatthegroupwhichcomprisesour HighSchoolorLess categoryfromthecohort,wecansee thatitiscomprisedofgroupsthatin2006stoppedtheireducationalattainmentatvariouslevels.for thosestudentsinthiscohortthatleftasaninthgrader,theaveragesalaryislessthanhalfofwhatitis forthosewhostoppededucationafterreceivingtheirhighschooldiploma.thereisevenadramatic differenceinwagesforthosewhoatleastwaiteduntiltheywereseniorsbeforeleavingschool.youcan alsoseethatthosewhoreceivedtheirgedin2006makeconsiderablemorethanthosewhosimply droppedout.thisgroupactuallymakesmorethanthosewhoreceivedtheirhighschooldiplomain 2006,butasagroup,theyareonaverageover10yearsolderthanthosewhograduatedhighschool,so theyhavebeenintheworkforcelonger.however,itisimportanttorealizetheeconomichardship representedbythelowwagesforallmembersofthisgroup.fiveyearsaftertheirlasteducation attainment,thesearkansasworkersaremakingverylowwages,andtheprospectsforahigherpaying jobgiventhislevelofeducationalachievementareverylow.!!!!!! 3!
4 Table!2! High!School!or!Less!!15,620!! 35.92%!!10,318!!!11,254!!!14,972!! 8,602! 6,971! 14.13%! 14.25%! 13.99%! 10.81%! 10.90%! %ofcohort 2011Wages HSS09! HSS10! HSS11! HSS12! GEDSPass!HSSGrad! Ifwebreakoutthegroupwhichhassomecollegebutnocredentialordegreetoshowforit,weagain seeaclearlinearrelationshipbetweenthenumberofcollegehours,basedontheclassification(grade level)atwhichtheyleftcollegeandaveragewages.thosewholeftcollegewithenoughhourstobe classifiedasaseniormakeonaverageover10,000moreayearthanthosewhoonlywenttocollege forasingleyearorless.thisrelationshipisagainverystrong,withsophomoresmakingmorethan freshmen,juniorsmorethansophomores,andseniorsmakingmorethanthosewholeftasjuniors. Unfortunately,almost70%ofthisgroupismadeupofthosewhowenttocollegeforasingleyearor less.however,itisimportanttonotethatforthisgroup,studentswhowenttocollegeforasingleyear orless,averagewagesareover6,000ayearmorethanthosewhostoppedwithahighschooldiploma. Table!3!! Some!College! 69.04%! 21,057! 25,756!!29,932!!!31,531!! %ofcohort 19.10%! 15.11%! 6.09%! 2011Wages Freshman! Sophomore! Junior! Senior!!!!!!! 4!
5 Splittingoutthis SomeCollege/NoDegree isrelativelynew.tounderstanditbetter,weneedtolook toseehowitrelatestoactuallyattainingadegreeorcertificate.inthetablebelow,youcanseeagain therelationship.someonewhoobtainsacertificateofproficiency(cp)onaveragemakesmorethan someonewhoattendedcollegebutdidnothaveenoughhourstobeclassifiedasanythingabovea freshman.thosewhoobtainatechnicalcertificate(tc)makemorethanthosewithacp.however, thosewithenoughhourstobeclassifiedasasophomorebutdonothaveadegreeorcredentialmake aboutthesameasthosewithatc.forthosewhowereawardedanassociates(aa),thereisa significantincreaseinwagesoverthosewithlesseducationalattainment. Table!4! 40.26%! 4.77%! 3.89%! College!AYainment!!25,681!!!25,756!! 21,057! 21,874!!29,807!!!29,932!!!30,615!! 11.14%! 8.30%!!31,531!! 3.36%! 5.28%! 3.55%!!38,872!! 19.46%! %ofcohort 2011Wages Higher!Degrees!Pay!Off! Again,thesearetheaveragewagesin2011forthosewhoselasteducationalachievementwasin2006. ThedifferencebetweensomeoneinArkansaswhogetstheirbachelor sdegreecomparedtosomeone whoonlyhasahighschooldiploma,38,872comparedto14,972,isdramatic.howeverthedata clearlyshowsthatthereisanincreaseinearningsallthewayuptheeducationstack.evenwithouta degreeorcertificatethereisanimpact,butthereisanaddedbenefitintheformofhigheraverage wagesforreceivingthedegreeorcredential. Thefinalcategoryforthiscohortwouldbethosewhohavedegreesbeyondabachelor s.table5 demonstrateswhathasbeenseeninallothercategories,thehighertheeducationalachievementthe highertheaveragewages.thisincludesthosewhowerestudentsingraduateschoolin2006butdidnot receivethedegreetheywereseeking.!!!!!! 5!
6 Table!5! 53.10%! Bachelor!and!Above!!88,270!! 38,871!!45,615!!! 38,970!!42,545!!!54,903!!!65,143!!!52,170!! 15.98%!!64,829!! %ofcohort 2011Wages 8.37%! 9.06%! 7.27%! 0.63%! 0.60%! 1.49%! 3.49%! Thedatashowthatthereisaneconomicadvantageincontinuingeducation.Highschoolstudentsinthe stateshouldbemadeawareoftheireconomicfutureiftheyentertheworkforceattheexpenseofnot continuingtheireducation.forthegraduatingclassof2006,thosewhodidnotgoontocollegemade onaverage14,972in2011.whenoneconsidersthatmanyofthose2006graduatesnowhavechildren, theeconomicoutlookforthosefamiliesissomewhatbleak.however,iftheycanfindthemeansto continuetheireducation,theycanexpectareturnonthatinvestment. Economic!Future!Tied!to!Education! Muchmoreresearchisneededaroundthesetopics.AsGovernorMikeBeebecontinuestostress,the economicfutureofarkansasistiedtotheeducationofitscitizens,whichthisreporthelpsecho.while thereareanumberofeffortsinthestatetoincreasethenumberofcollegegraduates,arkansasstill ranks49 th inthenationforthepercentageofadultswhichhaveabachelor sdegree.everyhighschool studentshouldbemadeaware,inaspracticaltermsaspossible,exactlywhattheireconomicfuturewill looklikeiftheydonotgraduatehighschoolandtheydonotcontinuetheireducation.arkansasshould becommittedtoencouragingcurrentworkerstocontinuetheireducationaswell.!!!!!! 6!
7 " # The# Arkansas# Research# Center# (ARC)# was# founded# in# 2009# by# a# grant# from# the# Institute# of# Education# Sciences#to#the#Arkansas#Department#of#Education.##ARC s#goal#is#to#support#students,#teachers,#and#school# administrators#by#using#student#longitudinal#data#to#provide#essential#information.##research#is#ongoing# and#enables#topjnotch#curriculum#development#and#learning#opportunities#for#educators#within#the#state.## ARC# currently# works# with# the# Arkansas# Departments# of# Human# Services,# Education,# Higher# Education,# Career#Education,#and#Workforce#Services#to#be#a#hub#of#PJ20W#information#for#the#state.## Authors: Dr.NealGibson,Director,ArkansasResearchCenter Dr.GregHolland,DirectorofResearchandDevelopment,ArkansasResearchCenter!!!!!! 7!
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