Associates Degrees, the Quality of the U.S. Workforce, and the Sources of U.S. Economic Growth

Transcription

1 Associates Degrees, the Quality of the U.S. Workforce, and the Sources of U.S. Economic Growth By Ross Gittell Community College System of New Hampshire and the University of New Hampshire Jon D. Samuels* Bureau of Economic Analysis Edinaldo Tebaldi Bryant University Prepared for: The Fourth World KLEMS Conference Madrid, Spain May 23-24, 2016 * The views expressed in this paper are solely those of the authors and not necessarily those of the U.S. Bureau of Economic Analysis or the U.S. Department of Commerce.

2 Background Increasing AD enrollment: In 2015, Community Colleges in the U.S. enrolled 10M students (43% of all undergraduates), up from 2.2M in (Bailey, Jaggars and Jenkins, 2015). Leveling off of educational attainment and returns to AD degrees: Percentage of students completing bachelors has plateaued. Returns to career technical training (CTE) degrees of 12-23%. (Stevens, Kulaender and Grosz, 2015). Most labor market analysis groups AD holders with Some College.

3 Motivation Economic Question: Role of Associate Degree holders in growth and productivity in the U.S. Measurement Question: Potential bias in labor quality and TFP estimates from grouping Associate degree holders with workers with Some College and no degree. Findings: Stylized facts on the AD workforce. No significant measurement bias.

4 Sources of Growth Model Standard KLEM model with direct aggregation across industries. Indexes of labor inputs by level of educational attainment E: j: industry i: gender, class, age group (7), education (7) E: Less than High School(1), Some High School(2),HS(3),Some College (4), AD(5),BA(6),MA+(7) Labor quality: lnq w ln H LEj, t Lijt i, j, t i E ln LQ w ( ln H ln H ) j, t Lijt i, j, t j, t i

5 Data: Industry-level Production Account Industry-level production account for 65 industries covering the total U.S. economy Labor follows Jorgenson, Ho, Samuels (2014) but expanded to include AD holders Decennial Census marginals from Current Population Survey. NIPA controls. Output, Capital, Intermediate Input from JHS(2014). Extrapolated to 2013 using the BEA-BLS Integrated Industry-level Production account. Integrated BEA/BLS Production Account Update, Survey of Current Business, September

6 Results: Stylized Facts AD workers growing as a share of the workforce E M P LOYMENT S H ARE O F A D H OL DERS, BY A GE CO HO RT, to 17 yrs 18 to 24 yrs 25 to 34 yrs 35 to 44 yrs 45 to 54 yrs 55 to 64 yrs

7 60% Results: Stylized Facts Change in Employment Share from 1992 to 2014 within age cohorts, by Educational Attainment, Female 40% 20% 0% -20% -40% 1.02% 6.70% 3.14% 1.91% -4.67% -8.09% 3.05% 7.05% 9.02% 7.01% 7.95% 10.05% 10.63% 8.98% 8.18% 9.13% 5.75% 7.09% 4.47% 4.91% 3.21% 4.41% -2.10% -1.29% 0.07% 1.95% -5.04% % % % % % % -7.83% -4.09% -2.10% -60% 18 to to to to to plus 0-12 yrs, no HS Diploma High school Some College Associate's degree Bachelor's degree Graduate degree

8 60% Results: Stylized Facts Change in Employment Share from 1992 to 2014 within age cohorts, by Educational Attainment, Male 40% 0.41% 3.62% 2.92% 2.02% 5.10% 3.38% 8.48% 20% 2.29% 6.40% 3.24% 5.28% 7.00% 0% -20% 5.01% -6.42% 3.63% -1.66% -9.93% 2.10% 5.11% 1.16% -3.55% -5.08% -3.17% 4.89% 2.53% 2.07% 3.16% % % -40% -4.92% -3.42% -2.36% -1.36% -1.13% -0.71% -2.83% -60% 18 to to to to to plus 0-12 yrs, no HS Diploma High school Some College Associate's degree Bachelor's degree Graduate degree

9 Results: Stylized Facts AD Employment participation higher than Some College Employment Participation Rate, Some College AD BA MA+

10 Results: Stylized Facts Statistically significant wage gap. 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% -5% Wage Difference (%) Relative to Some College, % 95% lower bound Associate Degree 95% upper bound Bachelor's Degree Note: The annual wage difference is estimated using a log-lin regression where hourly compensation is regressed against sex, age cohorts, and control for 65 industries. Total employment in each industry is used as weights and the standard errors were clustered by industry

11 18 TO 24 YRS 25 TO 34 YRS 35 TO 44 YRS 45 TO 54 YRS 55 TO 64 YRS 65 YRS P LUS Results: Stylized Facts Statistically significant wage gap. 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% WAGE DI FFE R ENT IAL (% ) R E L ATIVE TO SOME C OL LEGE, B Y AGE C O HO RT AD: AD: BA: BA: Note: The annual wage difference is estimated using a log-lin regression where hourly compensation is regressed against sex and control for 65

12 Hospitals Nursing and residential care facilities Legal services Computer systems design and related services Other transportation equipment Water transportation Educational services Ambulatory health care services Plastics and rubber products Food services and drinking places Motor vehicles bodies and trailers and parts Apparel and leather and allied products Administrative and support services Social assistance Information and data processing services Management of companies and enterprises Waste management and remediation services Paper products Electrical equipment appliances and components Petroleum and coal products Chemical products Air transportation Broadcasting and telecommunications Wood products Furniture and related products Federal General government Other transportation and support activities Transit and ground passenger transportation Textile mills and textile product mills Motion picture and sound recording industries Miscellaneous professional scientific and technical services Rail transportation S&L General Government Retail Trade Computer and electronic products Miscellaneous manufacturing S&L Government enterprises Construction Food and beverage and tobacco products Nonmetallic mineral products Machinery Amusements gambling and recreation industries Warehousing and storage Rental and leasing services and lessors of intangible assets Printing and related support activities Publishing industries (includes software) Truck transportation Federal Government enterprises Fabricated metal products Pipeline transportation Performing arts spectator sports museums and related activities Accommodation Real estate Other services except government Wholesale Trade Primary metals Farms Oil and gas extraction Support activities for mining Utilities Insurance carriers and related activities Forestry fishing and related activities Mining except oil and gas Federal Reserve banks credit intermediation and related activities Securities commodity contracts and investments Funds trusts and other financial vehicles Wage Differential, Associate Degree Holders versus Some College, by Industry, % -30% -20% -10% 0% 10% 20% 30% 40%

13 Results: Comparison of Labor Input Growth Labor Input Growth by Industry : Separate AD degree versus Some College Only

14 Results: Sources of U.S. Economic Growth Labor Quality and Contributions to Aggregate Value Added Growth Contributions Aggregate Value Added Growth Capital Labor Hours Quality Less than Some College Some College AD BA MA TFP Nominal Value Share (%) Capital Labor Less than Some College Some College AD BA MA Notes: Average annual percentages.

15 5.00 Results: Sources of U.S. Economic Growth Capital Less than Some College Some College AD BA MA+ TFP

16 Aside: Employment Participation Jorgenson, Ho, Samuels (2015): Evolving employment participation potentially large impact 10-year growth projection. Without the revival of participation rates for the less-educated, we find that U.S. economic growth will slow substantially from the period Employment participation = employment/population by sex, age, education. Decomposition: Hours=population*employment partic.*hours/wk. lnq w ln H w ( ln P ln ln h ) Lj, t Lijt i, j, t Lijt i, j, t i, j, t i, j, t i i

17 Results: Sources of U.S. Economic Growth 0.80 Contributions to Labor Input Growth Less than Some College Some College AD BA MA+ Population Participation Hours per week

18 Ambulatory health care services Hospitals and Nursing and residential care Retail trade State and local General Govt Construction Miscellaneous professional, scientific, and technical Administrative and support services Other services, except government Wholesale trade Food services and drinking places Management of companies and enterprises Computer systems design and related services Social assistance Fabricated metal products Other transportation and support activities Machinery Federal Reserve banks, credit intermediation, and Insurance carriers and related activities Truck transportation Real estate Educational services Amusements, gambling, and recreation industries State and local Gov Enterprise Accommodation Food and beverage and tobacco products Securities, commodity contracts, and investments Air transportation Utilities Warehousing and storage Miscellaneous manufacturing Motor vehicles, bodies and trailers, and parts Performing arts, spectator sports, museums, and Plastics and rubber products Support activities for mining Primary metals Farms Forestry, fishing, and related activities Chemical products Nonmetallic mineral products Transit and ground passenger transportation Rental and leasing services and lessors of intangible Oil and gas extraction Wood products Rail transportation Legal services Furniture and related products Waste management and remediation services Federal Gov Enterprise Contributions to GDP AD Holders :

19 Conclusions Common problem in economics: tractable model for question of interest. KLEMS framework useful. We expanded the model without affecting previous insights to identify role of AD holders in growth and productivity. AD holders should be differentiated from workers with some college in detailed analysis of educational attainment and labor market. For macro labor quality, no difference. International TFP level comparisons require a common classification scheme. Differences in educational systems make this difficult.